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Compensation in the Nonprofit Sector

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  • Christopher Ruhm
  • Carey Borkoski

Abstract

This analysis provides an in-depth investigation of the determinants of pay in the nonprofit sector. The main findings are as follows. First, holding constant individual characteristics, average weekly wages are 11 percent lower in nonprofit than for-profit jobs. However, this difference is entirely explained by the concentration of nonprofit employment in relatively low paid industries. Second, an accompanying longitudinal analysis, focusing on movements of workers between nonprofit and profit-seeking employers, suggests a nonprofit penalty of between 2 and 4 percent. Third, nonprofit workers in three specific industries (hospitals, nursing/personal care facilities, social services) earn as much or more than their for-profit counterparts. However, the effects of changing the type of employment varies substantially across the three industries. These results raise questions about several predominant models of nonprofit wage-setting.

Suggested Citation

  • Christopher Ruhm & Carey Borkoski, 2000. "Compensation in the Nonprofit Sector," NBER Working Papers 7562, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:7562
    Note: EH LS PE
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J4 - Labor and Demographic Economics - - Particular Labor Markets

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