Handbook of Research on Nonprofit Economics and Management

Handbook of Research on Nonprofit Economics and Management

Elgar original reference

Edited by Bruce A. Seaman and Dennis R. Young

Nonprofit organizations are arguably the fastest growing and most dynamic part of modern market economies in democratic countries. This Handbook explores the frontiers of knowledge at the intersection of economics and the management of these entities. The authors review the role, structure and behavior of private, nonprofit organizations as economic units and their participation in markets and systems of public service delivery, assess the implications of this knowledge for the efficient management of nonprofit organizations and the formulation of effective public policy, and identify cutting edge questions for future research.

Chapter 8: Nonprofit Wages: Theory and Evidence

Anne E. Preston and Daniel W. Sacks

Subjects: business and management, public management, social entrepreneurship, economics and finance, industrial economics, politics and public policy, public administration and management, public policy

Extract

Anne E. Preston and Daniel W. Sacks Introduction Compensation in the nonprofit sector has been a source of much thought and research over the last 30 years, with little consensus on whether there are differences in level and type of compensation from that of the for-profit or government sectors. This lack of agreement may seem surprising given how small (8 percent of employees in the US labor market) and homogeneous (predominantly professional, college educated and female) the labor force is. However, the homogeneity of the workers stands in stark contrast to the large variety of firms that employ these individuals. Characteristics of the nonprofit, for-profit and government labor forces are displayed in Table 8.1. Of the three categories, the nonprofit worker is most highly educated (14.9 average years of education), most likely to be professional (50 percent), most likely to work in a service industry (92 percent), most likely to live in the northeast (27 percent) and most likely to be female (69 percent). A closer look reveals that the typical nonprofit worker looks more similar to her government than her for-profit counterpart in terms of education, occupational and industry location, and sex, and both groups have significantly more experience than their for-profit counterparts. The average wage of the nonprofit worker, however, is significantly lower than the wage earned by government employees and not significantly different than the wage earned by for-profit workers. While nonprofit workers, like government workers, work fewer hours than for-profit employees, the shorter work week should...

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