The Overpaid and Underpaid: A Comparison of Labor Costs in Nonprofit and For-Profit Service Organizations

The Overpaid and Underpaid: A Comparison of Labor Costs in Nonprofit and For-Profit Service... Fudan J. Hum. Soc. Sci. https://doi.org/10.1007/s40647-018-0228-9 ORIGINAL PAPER The Overpaid and Underpaid: A Comparison of Labor Costs in Nonprofit and For-Profit Service Organizations 1 2 Jianzhi Zhao Jiahuan Lu Received: 3 February 2018 / Accepted: 18 April 2018 Fudan University 2018 Abstract The comparison between nonprofit and for-profit organizations has been a lingering question for scholars and practitioners. This research explores employee wage differentials across sectors using a national sample of child care workforce. After controlling for a range of individual, occupational, organizational, and com- munity factors, this research reports a significant wage premium for nonprofit child care teachers. In addition, this study finds evidence for both the labor donation and property rights hypotheses, but the property rights theory demonstrates compara- tively stronger explanatory power. Although individuals with stronger intrinsic motivation are more willing to donate labor for charitable outputs, inefficient management in nonprofits actually sets wage levels over the market level. Overall, the study highlights nonprofits’ comparative advantage in employee motivation but disadvantage in efficient management. The findings have implications for public and nonprofit management. Keywords Labor costs  Labor donation  Property rights  Human services & Jianzhi Zhao jianzhizhao@fudan.edu.cn Jiahuan Lu jiahuan.lu@rutgers.edu School of International Relations http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Fudan Journal of the Humanities and Social Sciences Springer Journals

The Overpaid and Underpaid: A Comparison of Labor Costs in Nonprofit and For-Profit Service Organizations

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Publisher
Springer Berlin Heidelberg
Copyright
Copyright © 2018 by Fudan University
Subject
Social Sciences; Social Sciences, general; Economics, general; Philosophy, general
ISSN
1674-0750
eISSN
2198-2600
D.O.I.
10.1007/s40647-018-0228-9
Publisher site
See Article on Publisher Site

Abstract

Fudan J. Hum. Soc. Sci. https://doi.org/10.1007/s40647-018-0228-9 ORIGINAL PAPER The Overpaid and Underpaid: A Comparison of Labor Costs in Nonprofit and For-Profit Service Organizations 1 2 Jianzhi Zhao Jiahuan Lu Received: 3 February 2018 / Accepted: 18 April 2018 Fudan University 2018 Abstract The comparison between nonprofit and for-profit organizations has been a lingering question for scholars and practitioners. This research explores employee wage differentials across sectors using a national sample of child care workforce. After controlling for a range of individual, occupational, organizational, and com- munity factors, this research reports a significant wage premium for nonprofit child care teachers. In addition, this study finds evidence for both the labor donation and property rights hypotheses, but the property rights theory demonstrates compara- tively stronger explanatory power. Although individuals with stronger intrinsic motivation are more willing to donate labor for charitable outputs, inefficient management in nonprofits actually sets wage levels over the market level. Overall, the study highlights nonprofits’ comparative advantage in employee motivation but disadvantage in efficient management. The findings have implications for public and nonprofit management. Keywords Labor costs  Labor donation  Property rights  Human services & Jianzhi Zhao jianzhizhao@fudan.edu.cn Jiahuan Lu jiahuan.lu@rutgers.edu School of International Relations

Journal

Fudan Journal of the Humanities and Social SciencesSpringer Journals

Published: May 30, 2018

References

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