Productivity, wages and intrinsic motivations
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There is a long-standing debate in labour economics on the impact of workers’ intrinsic motivations on equilibrium wages. One direction in economic theory suggests that intrinsically motivated workers are willing to accept lower wages and “donate” work, for example, in terms of unpaid overtime (the donative-labour hypothesis). In the other direction, intrinsic motivations are expected to increase worker productivity and, in turn, wages (the intrinsic motivation-productivity hypothesis). Using a new database of a sample of workers in the cooperative non-profit sector, we find that, consistently with the motivation-productivity hypothesis, more motivated workers earn significantly higher wages, which signals higher productivity. Evidence supporting the donative-labour hypothesis is weaker, even though a generally positive connection between motivations and work-donation is confirmed. We interpret these findings by arguing that the impact of the donative-labour effect is dominated by the intrinsic motivation-productivity effect.
KeywordsLabor-donation Intrinsic motivations Productivity Wages Wage differentials Non-profit
JEL ClassificationsJ30 J31 I30 L26
We are gratefully indebted to Kaushik Basu, Avner Ben-Ner, Carlo Borzaga, Luigino Bruni, Benedetto Gui, Alois Stutzer, Robert Sugden, an anonymous referee and participants to seminars held in Trento and Rome for their comments and suggestions. The usual disclaimer applies. We are also grateful to EuRICSE (European Research Institute on Cooperative and Social Enterprises, Trento, Italy) and to its staff for data access and support. The survey on which the empirical analysis is based was carried out between March 2004 and February 2008 by five research units at the Universities of Brescia, Milan, Naples, Reggio Calabria and Trento. The survey was granted financial support by: (1) the Italian Ministry for University and Scientific Research (MIUR) awarded to the national research project (PRIN) titled: “The Economic Role of Nonprofit Organizations: New Theoretical Developments and Empirical Tests”, and (2) the Foundation of the Saving Bank of the Lombard Provinces (Ca.Ri.P.Lo. Foundation).
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