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Working in the profit versus not for profit sector: what difference does it make? An inquiry on preferences of voluntary and involuntary movers

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  • Leonardo Becchetti
  • Stefano Castriota
  • Sara Depedri

Abstract

We investigate what is behind the profit/not for profit wage differential by comparing judgments on job caracteristics of workers who voluntarily or involuntarily moved from the first to the second sector. We define voluntary movers those who applied for a job in a not for profit organization and, when successful, resigned from the for profit one, while involuntary movers can either have been laid off by the company or have resigned without already having a job offer in the not for profit sector when leaving the firm. We observe that almost half of voluntary movers end up with non higher wages and, surprisingly, higher job satisfaction after the change. A vast majority of them exhibit significantly higher time flexibility, improved relationships with stakeholders, closer consistence with educational skills and higher satisfaction of intrinsic motivations in the new job. Our findings support the profit/no profit compensating differential hypothesis and shed light on mechanisms which are beyond the job donation behavior of intrinsically motivated workers.

Suggested Citation

  • Leonardo Becchetti & Stefano Castriota & Sara Depedri, 2010. "Working in the profit versus not for profit sector: what difference does it make? An inquiry on preferences of voluntary and involuntary movers," Euricse Working Papers 1005, Euricse (European Research Institute on Cooperative and Social Enterprises).
    • Handle: RePEc:trn:utwpeu:1005
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    References listed on IDEAS

    as
    1. Dale T. Mortensen, 1978. "Specific Capital, Bargaining, and Labor Turnover," Discussion Papers 320, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    2. Susan Rose-Ackerman, 1996. "Altruism, Nonprofits, and Economic Theory," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 701-728, June.
    3. Dale T. Mortensen, 1978. "Specific Capital and Labor Turnover," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 572-586, Autumn.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Federica VIGANO & Andrea SALUSTRI, 2015. "Matching profit and Non-profit Needs: How NPOs and Cooperative Contribute to Growth in Time of Crisis. A Quantitative Approach," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 86(1), pages 157-178, March.
    2. Marcelo Vieta, 2013. "The emergence of the empresas recuperadas por sus trabajadores: A political economic and sociological appraisal of two decades of self-management in Argentina," Euricse Working Papers 1355, Euricse (European Research Institute on Cooperative and Social Enterprises).
    3. Andrea Salustri & Federica Viganò, 2015. "Human development and well-being during the great recession. The non-profit sector as a capability enhancing workplace," BEMPS - Bozen Economics & Management Paper Series BEMPS27, Faculty of Economics and Management at the Free University of Bozen.

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    More about this item

    Keywords

    Social enterprises; wage differentials; intrinsic motivations; changing job; dissatisfaction;
    All these keywords.

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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