WP 05|10 Working in the profit versus not for profit sector: what difference does it make? An inquiry on preferences of voluntary and involuntary movers

Research Area: Economic theory
Edited by: Leonardo Becchetti, Stefano Castriota, Sara Depedri

We investigate what is behind the profit/not for profit wage differential by comparing judgments on job characteristics of workers who voluntarily or involuntarily moved from the first to the second sector. We define voluntary movers those who applied for a job in a not for profit organization and, when successful, resigned from the for profit one, while involuntary movers can either have been laid off by the company or have resigned without already having a job offer in the not for profit sector when leaving the firm. We observe that almost half of voluntary movers end up with non higher wages and, surprisingly, higher job satisfaction after the change. A vast majority of them exhibit significantly higher time flexibility, improved relationships with stakeholders, closer consistence with educational skills and higher satisfaction of intrinsic motivations in the new job. Our findings support the profit/no profit compensating differential hypothesis and shed light on mechanisms which are beyond the job donation behavior of intrinsically motivated workers.

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