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Does It Pay to Work for Free? Wage Returns and Gender Differences in the Market for Volunteers

  • Cozzi, Guido

    ()

    (University of St. Gallen)

  • Mantovan, Noemi

    ()

    (Bangor University)

  • Sauer, Robert M.

    ()

    (Royal Holloway, University of London)

Working as a volunteer is a widespread phenomenon that has both individual and societal benefits. In this paper, we identify the wage returns to working for free by exploiting exogenous variation in rainfall across local area districts in England, Scotland and Wales. Instrumental variables estimates reveal large returns for both men and women. However, the returns are differentially greater for men and account for a substantial proportion of the gender earnings gap. A comparison of OLS and IV estimates also indicates negative selection into volunteering for both genders. In a model of optimal volunteering, negative selection implies that a reduction in the cost of volunteering will lead to an expanded and higher-skilled pool of volunteers, and greater societal benefits. A policy that has the effect of reducing the cost relatively more for women may also narrow the gender earnings gap.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7697.

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Length: 38 pages
Date of creation: Oct 2013
Date of revision:
Handle: RePEc:iza:izadps:dp7697
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