The Effects of Property Rights on Labor Costs of Nonprofit Firms: An Application to the Day Care Industry

Preston, Anne

doi:10.2307/2098472

Cited by 94 publications

(93 citation statements)

References 6 publications

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“…However, using the same data as Weisbrod but with a different econometric approach, Goddeeris (1988) finds little evidence of a pay gap between public interest and private lawyers. Preston (1988), in a comparison of nonprofit and for-profit daycare center workers, finds no wage differential in non-federally regulated centers (and a positive nonprofit wage differential in centers that are regulated.) However, the absence of a (negative) wage differential is perhaps unsurprising in this context as more recent research demonstrates that we primarily observe differentials amongst highly educated and "white-collar" workers (Leete, 2001), a result which is found in this paper as well.…”

Section: Related Literaturementioning

confidence: 99%

The supply and demand of motivated labor: When should we expect to see nonprofit wage gaps?

Jones

2015

Labour Economics

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Nonprofit workers earn less on average than for-profit workers. Existing empirical work leaves open the question of whether this is driven by a willingness to work for less (the "labor donation hypothesis"). Wage gaps have consistently been found to be present in some industries and absent in others. In this paper, I consider when we should expect labor donations to nonprofits to generate wage gaps and, in doing so, offer an explanation for the previous inconsistent results. I highlight the importance of nonprofits' labor demand. Specifically, it is only in nonprofit employers' interest to maintain low wages if their labor demand does not exceed the number of workers who are willing to work for less. Otherwise, nonprofits must raise wages to attract other workers. This yields the prediction that wage gaps should be largest when the nonprofit share of labor within an industry is low. As nonprofit share increases, wages should equalize. Using economy-wide Census microdata, I provide evidence consistent with this prediction. I use more detailed data from the nursing home industry to better control for market conditions and rule out alternative explanations. I find that the quality of work in nonprofit nursing homes is highest in localities with low nonprofit share, where wage gaps are largest. This provides evidence that the relationship between wage gaps and nonprofit share is driven by "motivated types" sorting into nonprofit jobs.

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Section: Related Literaturementioning

confidence: 99%

The supply and demand of motivated labor: When should we expect to see nonprofit wage gaps?

Jones

2015

Labour Economics

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“…Fama and Jensen (1983), Preston (1988), McLean (1989), and Brody (1996) argue that nonprofit organizations lack efficient principals (boards) who can hold agents (managers) accountable. Unlike for-profit organizations, nonprofit organizations do not possess a variety of shareholders who expect high returns from their investments and who have financial incentives to control their agents.…”

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confidence: 99%

Principal-agent relationships on the stewardship-agency axis

Caers

Bois

Jegers

et al. 2006

Nonprofit Management Leadership

148

119

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T HIS ARTICLE PROVIDES an overview of the literature on nonprofit principal-agent relationships. It depicts the nature of agency theory and stewardship theory, analyzes the origin of their struggle within the nonprofit structure, and marks directions for a conciliatory approach.Note: We gratefully acknowledge Scott Gassler, Bruno Heyndels, the three anonymous reviewers, and editor Roger Lohmann for their constructive comments.

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“…4 Borjas et al (1983), for example, find evidence of a wage premium in the nursing home industry and argue that this result is consistent with the attenuated property rights explanation. Similarly, Preston (1988) provides evidence suggesting that employees of federally regulated nonprofit daycare centers enjoy a wage premium.…”

Section: Review Of the Literaturementioning

confidence: 99%

Nonprofit/for-profit status and earning differentials in the Japanese at-home elderly care industry: Evidence from micro-level data on home helpers and staff nurses

Noguchi¹,

Shimizutani²

2007

Journal of the Japanese and International Economies

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In April 2000, Japan embarked on a reform of its health care market. Along with the introduction of the long-term care insurance scheme, the government for the first time allowed for-profit operators to compete head-on with non-profit operators in the provision of at-home care services.Taking advantage of a unique and rich micro-level survey, this study is the first to examine wage differentials between the nonprofit and the for-profit sector in Japan's nursing care industry, concentrating on home helpers and staff nurses. Controlling for nonrandom unobserved selection biases, our results show that a nonprofit wage premium exists. This finding supports the hypothesis that nonprofit providers operate under non-distributional constraints.Classification Code: I11

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The Effects of Property Rights on Labor Costs of Nonprofit Firms: An Application to the Day Care Industry

Cited by 94 publications

References 6 publications

The supply and demand of motivated labor: When should we expect to see nonprofit wage gaps?

The supply and demand of motivated labor: When should we expect to see nonprofit wage gaps?

Principal-agent relationships on the stewardship-agency axis

Nonprofit/for-profit status and earning differentials in the Japanese at-home elderly care industry: Evidence from micro-level data on home helpers and staff nurses

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