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

Posted: 2 Nov 2013

See all articles by Guido Cozzi

Guido Cozzi

University of St. Gallen

Noemi Mantovan

Bangor University - Bangor University

Robert M. Sauer

University of London - Royal Holloway College

Abstract

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.

Keywords: volunteering, altruism, gender differences, discrimination, instrumental variables, rainfall, negative selection

JEL Classification: C26, D64, H41, J16, J31, J71

Suggested Citation

Cozzi, Guido and Mantovan, Noemi and Sauer, Robert M., Does it Pay to Work for Free? Wage Returns and Gender Differences in the Market for Volunteers. IZA Discussion Paper No. 7697, Available at SSRN: https://ssrn.com/abstract=2349000 or http://dx.doi.org/10.2139/ssrn.2349000

Guido Cozzi (Contact Author)

University of St. Gallen ( email )

Noemi Mantovan

Bangor University - Bangor University ( email )

Robert M. Sauer

University of London - Royal Holloway College ( email )

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