Working Paper: NBER ID: w7562
Authors: Christopher J. Ruhm; Carey Borkoski
Abstract: This analysis provides an in-depth investigation of the determinants of pay in the nonprofit sector. The main findings are as follows. First, holding constant individual characteristics, average weekly wages are 11 percent lower in nonprofit than for-profit jobs. However, this difference is entirely explained by the concentration of nonprofit employment in relatively low paid industries. Second, an accompanying longitudinal analysis, focusing on movements of workers between nonprofit and profit-seeking employers, suggests a nonprofit penalty of between 2 and 4 percent. Third, nonprofit workers in three specific industries (hospitals, nursing/personal care facilities, social services) earn as much or more than their for-profit counterparts. However, the effects of changing the type of employment varies substantially across the three industries. These results raise questions about several predominant models of nonprofit wage-setting.
Keywords: No keywords provided
JEL Codes: J3; J4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Nonprofit jobs (L39) | average weekly wage (lower) (J31) |
| average weekly wage (lower) (J31) | nonprofit jobs (wage penalty disappears with controls) (L39) |
| Nonprofit to for-profit job transition (L33) | nonprofit wage penalty (J32) |
| Specific industries (L89) | nonprofit workers earnings (L39) |