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Returns to Open Source Software Engagement: An Empirical Test of the Signaling Hypothesis


  • Juergen Bitzer

    () (Department of Economics, University of Oldenburg)

  • Ingo Geishecker

    () (Department of Economics, University of Goettingen)

  • Philipp Schroeder

    () (Aarhus School of Business, Aarhus University, Denmark)


Job-Market signaling is ranked high among the explanations why in- dividuals engage voluntarily in OSS projects. If true, signaling implies the existence of a wage premium for OSS engagement. However, due to a lack of data this issue has not been tested previously. Based on a novel data set comprising detailed demographic and wage information for some 7,000 German IT employees, this paper fills this gap. In the empirical analysis, however, we find no support for the signaling hypoth- esis, a result that is robust to different measures of OSS involvement and different model specifications.

Suggested Citation

  • Juergen Bitzer & Ingo Geishecker & Philipp Schroeder, 2010. "Returns to Open Source Software Engagement: An Empirical Test of the Signaling Hypothesis," Working Papers V-321-10, University of Oldenburg, Department of Economics, revised Jan 2010.
  • Handle: RePEc:old:dpaper:321

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    References listed on IDEAS

    1. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2003. "Instrumental variables and GMM: Estimation and testing," Stata Journal, StataCorp LP, vol. 3(1), pages 1-31, March.
    2. Michael Spence, 2002. "Signaling in Retrospect and the Informational Structure of Markets," American Economic Review, American Economic Association, vol. 92(3), pages 434-459, June.
    3. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters,in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
    4. Bitzer, Jurgen & Schrettl, Wolfram & Schroder, Philipp J.H., 2007. "Intrinsic motivation in open source software development," Journal of Comparative Economics, Elsevier, vol. 35(1), pages 160-169, March.
    5. Justin Pappas Johnson, 2002. "Open Source Software: Private Provision of a Public Good," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 11(4), pages 637-662, December.
    6. Andrew Weiss, 1995. "Human Capital vs. Signalling Explanations of Wages," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 133-154, Fall.
    7. Schmidt, Christoph M & Zimmermann, Klaus F, 1991. "Work Characteristics, Firm Size and Wages," The Review of Economics and Statistics, MIT Press, vol. 73(4), pages 705-710, November.
    8. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, January.
    9. David P. Myatt & Chris Wallace, 2002. "Equilibrium Selection and Public-good Provision: The Development of Open-source Software," Oxford Review of Economic Policy, Oxford University Press, vol. 18(4), pages 446-461.
    10. Hakim Orman Wafa, 2008. "Giving It Away for Free? The Nature of Job-Market Signaling by Open-Source Software Developers," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-33, June.
    11. Arnaud Chevalier & Colm Harmon & Ian Walker & Yu Zhu, 2004. "Does Education Raise Productivity, or Just Reflect it?," Economic Journal, Royal Economic Society, vol. 114(499), pages 499-517, November.
    12. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, Oxford University Press, vol. 87(3), pages 355-374.
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    More about this item


    open source software; signaling; wage differentials;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles


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