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Nonprofit Wages: Theory and Evidence

Barry Hirsch (), David Macpherson () and Anne E. Preston ()
Additional contact information
Anne E. Preston: Haverford College

No 10571, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The nonprofit sector's share of wage and salary employment in the U.S. has increased over time, from about 5½ percent in the mid-1990s to 7 percent in 2015. This paper surveys the literature and presents new evidence on the employment and earnings of workers in the nonprofit sector since 1994. As compared to the private for-profit sector, nonprofits have a more educated and older workforce, with employment concentrated in health, education, and service occupations and industries. Standard wage level analysis indicates lower wages for men employed in nonprofits compared to male for-profit workers with similar measured attributes. No such penalty is found for women. Based on panel estimates of wage changes, we find no substantive wage penalties for either women or men moving between jobs in and outside the nonprofit sector. We conclude that wages in the nonprofit and for-profit sectors, on average, differ little for similar workers and jobs.

Keywords: nonprofit wage differentials; nonprofit employment; Current Population Survey (CPS) (search for similar items in EconPapers)
JEL-codes: J21 J31 L33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hme and nep-lma
Date: 2017-02
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Published in: Bruce Seaman and Dennis Young (eds.), Handbook of Research on Nonprofit Economics and Management, 2nd ed., Northampton, MA: Edward Elgar, 2018, pp. 146-179

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