Volunteering Is A Magic Pill In The Labor Market... Or Is It?
Many teenagers today are involved in unpaid activities. Why do they do this?
Anna Malova, Bachelor program Economics' 2016 alumna is looking for an answer.
Anna Malova: There are some theories explaining the underlying reasons for it. The two most commonly accepted are investment and consumption theories. The former assumes that people volunteer in order to have higher wages in the future, while the latter suggests that they just like to volunteer on the basis of their personal interests. If the classification is valid, then only people from the first group should have higher income compared to non-volunteers.
In my research I was not looking for the answer to the question about the motivation. My idea was that behind each motivation stand certain social skills that predetermine not only the choice to volunteer, but also the income level. So, I took five basic personal characteristics from psychology and tested my hypothesis.
To my surprise, volunteers of different motivations are indeed driven by different personal characteristics: consumption volunteers are extraverted and organized, while investment volunteers are agreeable. It means that the choice to volunteer is connected to the social skills a person possesses! Moreover, I found out that volunteering is not paid out in the future, meaning that even those who follow the investment model have the same average income as those who follow the consumption model or do not do volunteering at all. However, emotional stability is anyway beneficial in terms of money in the labor market. Therefore, my advice to youngsters is the following: volunteer only if you feel like doing it, otherwise work on your emotional stability, agreeableness and self-discipline and leave volunteering for others, because it will not help you earn more.
Thesis advisor, Ksenia Panidi, Ph.D.: Why do people volunteer? So far, there have been many attempts to answer this question, however, existing evidence is contradictory. Some researchers find that people volunteer mostly because they like it, while others find that people use volunteering to later signal their social skills on the job market and receive higher wage. In her work, Anna attempts to disentangle these two types of volunteer motivation. She finds that those who volunteer but do not donate money to charity are more likely to use volunteering as an employment strategy.
Paper Title: The Effect of Social Skills on The Link Between Volunteering and Income
Abstract: In this research I study the interaction of social skills gauged by means of five personality traits, hours spent on performing unpaid work, and the income level. I suggest a way to separate those volunteers who are guided by the consumption model from those guided by the investment one on the grounds of their charitable money donations. I assume that the consumption theory driven volunteers also contribute to society through money donations, while the investment specification driven volunteers do not give their money to charity. The results of the probit regressions suggest that volunteers of different motivations are indeed driven by different personal characteristics: consumption volunteers are extraverted and organized, while investment volunteers are agreeable. Further analysis is conducted using the two-stage least squares regression, since the usage of the Heckman-correction model was empirically proved to be unnecessary. The analysis demonstrated that investment volunteers have their average income level shifted downwards if measured in the same year, thus confirming the idea that to have higher income in the future they pay more attention to volunteering today. Also, consumption volunteers perform unpaid work more if they have very high or very low income level due to income and substitution effects. The most important fact is that volunteering is not paid out in the future under either specification, although it is fair to notice that in the investment model people do obtain higher wage rates due to several personality characteristics they possess (agreeableness and organization), while these features are not significant when talking about wages of consumption volunteers.