Volunteering and Income – The Fallacy of the Good Samaritan?

Abstract

This paper explores individual motives for volunteering. The analysis is based on the interpretation of volunteering as a consumption good (consumption model) or as a mean to increase individual's own human capital (investment model). We present an econometric framework taking into account self selection into volunteering and simultaneity between the volunteering decision and the determination of income in order to test these two models and to identify the underlying motives.We find strong statistical evidence for the investment model with a highly robust and significant impact of volunteering on the wage rate. Within the framework of the investment model it turns out that the number of volunteering hours plays a major role in explaining this wage premium. This supports the significance of skill acquisition to accumulate human capital, the importance of deepening of social contacts and signalling willingness to perform. As far as the consumption model is concerned we find no clear statistical evidence for its validity.

A Cross-Cultural Examination of Student Volunteering: Is It All About Résumé Building?

“…Consequently, individuals with volunteering experience tend to be hired or command a higher wage (Katz and Rosenberg , 2005) Empirical data for the most part does not contradict this line of reasoning. Hackl, Halla, and Pruckner (2007) using Austrian data found evidence of a wage premium of 18.7 percent on average for volunteers. A Canadian study found a 6-7 percent return of volunteering in annual earnings for Canadian workers (Day and Devlin, 1998).…”

Does it pay to care? Volunteering and employment opportunities

“…We are aware of seven previous studies by economists that confronted the aforementioned theoretical expectations with the empirical reality: Day and Devlin (1997), Day and Devlin (1998), Prouteau and Wolff (2006), Hackl et al (2007), Sauer (2015, Wilson et al (2017) and Cozzi et al (in press). Table 1 summarises the research results published, between 1997 and 2017, either as a journal article or as a working paper.…”

Labour Force Participation and Employment of Humanitarian Migrants: Evidence from the Building a New Life in Australia Longitudinal Data

“…In Canada, it was found that returns to volunteering accounted for 6-7 per cent of annual earnings (Day & Devlin 1998). In Austria, the number of volunteering hours plays a major role in explaining the wage premium through the accumulation of human capital (Hackl et al 2007). On the assumption that those who engage in unpaid work are more active in finding a job and more likely to get a paid job because they have accumulated local work experience or other forms of human capital, which are more valued by local employers, we propose hypotheses 3a and 3b.…”