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Is there a wage premium for volunteer OSS engagement? – signalling, learning and noise

Jürgen Bitzer (), Ingo Geishecker and Philipp Schröder

Applied Economics, 2017, vol. 49, issue 14, 1379-1394

Abstract: Volunteer-based open-source production has become a significant new model for the organization of software development. Economics often pictures this phenomenon as a case of signalling: individuals engage in the volunteer programming of open-source software (OSS) as a labour-market signal resulting in a wage premium. Yet, this explanation could so far not be empirically tested. This article fills this gap by estimating an upper-bound composite wage premium of voluntary OSS contributions and by separating the potential signalling effect of OSS engagement from other effects. Although some 70% of OSS contributors believe that OSS involvement benefits their careers, we find no actual labour-market premium for OSS engagement. The presence of other motives, such as fun of play or altruism, renders OSS contributions too noisy to function as a signal.

Date: 2017
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