Relational Goods, Monitoring and Non‐pecuniary Compensations in the Nonprofit Sector: The Case of the Italian Social Services

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit company supported by Deutsche Post World Net. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. (1984), effort correlates not only with wages, but also with non-monetary compensations. These take the form of relational goods and services by-produced in the delivery of particular services. By paying higher non-pecuniary compensations, the nonprofit sector attracts intrinsically similarly skilled, but more motivated workers, able to provide in fact a higher level of effort than their counterparts in the forprofit sector. On an empirical ground, the paper provides a number of econometric tests that confirm the main predictions of the model in Italy's case. It adds to the available empirical literature by introducing in the analysis direct measures of non-pecuniary compensations and job satisfaction.JEL Classification: I00, J31, L31, L84

Wage Effects of Recruitment Methods: The Case of the Italian Social Service Sector

“…Informal methods would better suit the needs to select ideologically motivated personnel in NPOs, especially NPO1s. Previous research has argued that nonprofit organisations would tend to hire ideologically motivated workers by paying them less: low monetary remuneration would cause a self-selection mechanism (Handy and Katz, 1998;Mosca, Musella and Pastore, 2007). This paper adds to the previous literature by suggesting that in addition to lower than average monetary compensations, informal recruitment methods are part of the process of self-selection of motivated workers in nonprofit organisations.…”

“…In fact, section 4 of this paper has provided clear evidence that human capital differences are not in favour of state organisations. In addition, using the same dataset, Mosca, Musella and Pastore (2007) find that the degree of motivation and job satisfaction is much higher in workers employed in the nonprofit than in the state sector, despite wage differences in favour of the latter. Furthermore, using the organisations' file of the same data, Destefanis and Maietta (2003) show that there are no statistically significant efficiency differences between public and nonprofit organisations.…”

“…Mosca, Musella and Pastore (2007 , Table 7) estimated a private annual rate of return to education of about 0.029 in basic earnings equations and of 0.020 when adding all the control variables contained in Table 4. These figures are lower than the low rate of return to education found for the entire country in previous studies (6.6 for men and 7.7 for women, according to Brunello et al, 2000).…”

“…This allows us asking and answering the questions whether nonprofit organisations employ lower productivity workers and pay them less than other types of organisations within the sector. In fact, previous contributions have already studied the determinants of the nonprofit wage gap (see, for instance, Preston, 1989;Leete, 2000;Ruhm and Borkoski, 2000;Pestana Barros, 2006;Mosca, Musella and Pastore, 2007), though leaving aside the issue of the possible differences in returns to human capital across organisations' types. This paper finds clear evidence that the 1 In fact, the use of informal contacts, such us the help of family and friends or other forms of recommendations, is a common search and recruitment strategy in the U.S., as Corcoran, Datcher and Duncan (1980), Holzer (1988) and Ioannides and Datcher Loury (2004), among others, note, but also in the UK (Gregg and Wadsworth, 1992), in the European Union (Pellizzari, 2004) and in Italy (Pistaferri, 1999;Meliciani and Radicchia, 2005).…”

Cause-Fit, Positive Attitudes and Behaviors Within Hybrid Colombian Organizations

“…Prior research in socially oriented enterprises has demonstrated that non-monetary remunerations are key in order to improve worker compensation (Amin, 2009;Mosca, Musella, & Pastore, 2007). Because people working in these enterprises care about Theory and research on the employer-employee exchange suggest that the psychological contract (PC) approach is suitable to study employment relationships based on ideological grounds.…”