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

Anne E Preston

Journal of Industrial Economics, 1988, vol. 36, issue 3, 337-50

Abstract: This paper estimates differences in labor costs between nonprofit and for-profit firms in the day-care industry. A theoretical model, which draws on the property-rights literature as well as recent theo ries of nonprofit labor markets, predicts that the magnitude and sign of the nonprofit salary differential will depend on specific characteristics of the samples analyzed. Empirical results reveal that in th e most competitive segment of the day care industry the nonprofit salary differential is insignificant. However, in the less-competitive, government-subsidized segment of the industry the nonprofit different ial is significantly positive: it ranges from 5 percent to 10 percent. Copyright 1988 by Blackwell Publishing Ltd.

Date: 1988
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