3 Volunt Fiorillo-2011-Annals of Public and Cooperative Economics

MONETARY REWARDS AND THE MOTIVITATION OF VOLUNTEERS165

DO MONETARY REWARDS CROWD OUT THE INTRINSIC MOTIVATION OF VOLUNTEERS?SOME EMPIRICAL EVIDENCE FOR ITALIAN VOLUNTEERS

Damiano FIORILLOUniversity of Napoli Parthenope, Italy

ABSTRACT: The paper studies the determinants of regular volunteering, taking its cue from the previous literature on extrinsic and intrinsic motivations. Its main contribution lies in the analysis of the role of monetary rewards in influencing intrinsic motivation. It uses frameworks that allow empirical hypotheses to be made about the effects of monetary rewards, intrinsic motivation and the combined term on volunteer labour supply. With an Italy-based survey, the paper shows, controlling for endogenous bias, that monetary payments as well as intrinsic motivation have roles in the real-life decision to supply volunteer work, but monetary rewards do not crowd out intrinsic motivation.

1 Introduction

In the literature on social sciences it is possible to identify two different branches that support the idea that monetary rewards may crowd out intrinsic motivation. The first branch is reflected by Titmuss and Upton,1 who argue that paying for blood donations undermines cherished social values: payment reduces or totally eliminates the willingness to donate blood. The second branch comes from the realm of cognitive social psychology2 : under particular conditions monetary rewards undermine intrinsic motivation. This effect is termed the hidden cost of reward (Lepper and Green 1978, Deci 1975, Deci and Ryan 1985). It is one of the most important anomalies in economics, as it suggests the opposite of the most

I would like to thank the two anonymous referees whose comments undoubtedlyimproved the final version of the paper. I also wish to thank Luigi Aldieri, Bruna Bruno, Maria Rosaria Carillo, Floro Ernesto Caroleo, Angelo Castaldo, Sergio Destefanis, Giuseppe Freni, Bruno Frey, Vincenzo Lombardo, Francesco Pastore, Giovanni Trovato, Gilberto Tu- rati and the participants at the XXII AIEL Conference as well as at the University of Naples Federico II and Pavia for helpful comments and suggestions to early version of the paper. Data were kindly provided by Carlo Borzaga. The usual disclaimer applies. Email: [email protected] Resume en fin darticle; Zusammenfassung am Ende des Artikels; resumen al final delartculo.1 Titmuss (1970), Upton (1973).2 For a survey see Pittman and Heller (1987) and Lane (1991).

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Annals of Public and Cooperative Economics 82:2 2011pp. 139165Annals of Public and Cooperative Economics C 2011 CIRIEC. Published by Blackwell Publishing Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA, MA 02148, USA

fundamental law of economics, that raising monetary incentives reduces, rather than increases, supply. As a result, it is inadvisable to use the price mechanism to elicit a higher supply and one should rely on a quite different type of incentive, namely intrinsic motivation (Frey and Jegen 2001).Based on works by Frey and Go tte (1999) and Frey and Jegen (2001), the present paper empirically analyses whether monetary rewards to Italian volunteers affect their intrinsic motivation using the Survey on Employment in the Social Care and Educational Services conducted by FIVOL-FEO on public, for-profit and non-profit organizations operating in the supply of social services in Italy (see Borzaga 2000, Borzaga and Musella 2004). The paper focuses on the voluntary sector because the supply of unpaid labour within social organizations expanded considerably in the late1990s in a number of Western countries. In Italy, the supply of unpaid work in formal organizations increased by 70 percent in the period from 19952003 (Istat 2003).

It is worth pointing out the importance of the supply of voluntary labour in social organizations: first of all, due to the welfare reforms that limit public spending, voluntary work is a vital production input for non-profit organizations supplying social, educational, cultural, recreational and other services. Second, as the social capital literature suggests, voluntary work in Italy would appear to contribute to regional economic growth by making public institutions and markets more efficient (Putnam 1993, Beugelsdijk and Van Schaik 2005).Volunteering is a complex phenomenon the explanation of which transcends the limits of one single approach because different disciplines such as anthropology, psychology, sociology and economics offer insights into the motives for volunteering. The motivational reasons to explain volunteering are classified into two groups. One group focuses on internal rewards due to intrinsic motivation originating from helping others per se. The other group does not concern the enjoyment of volunteering in itself but the increase in utility due to extrinsic rewards from volunteering (Hackl et al.2007).

A widespread body of empirical literature stresses extrinsic motives for voluntary activities3 . Menchik and Weisbrod (1987), Day and Devlin (1996) and Hackl et al. (2007), for example, found strong evidence of an extrinsic motivation given by the accumulation in human capital. However, few studies investigate the role of both intrinsic and extrinsic motivations in explaining the individual behaviour of volunteers. Recent empirical papers show the importance of intrinsic motivation in explaining unpaid labour supply (Cappellari and Turati 2004, Carpenter and Myers2007, Cappellari et al. 2007, Meier and Stutzer 2008, Bruno and Fiorillo 2009). However, there is not enough evidence of how volunteers would respond if their work were directly paid.This paper sets out to investigate the role of monetary rewards in influencing intrinsic motivation in volunteer labour supply. Using frameworks that allow empirical hypotheses to be made regarding the effects of monetary rewards, intrinsic motivation and the interaction term between monetary rewards and intrinsic motivation on volunteer labour supply, the paper shows, controlling for endogenous bias, that monetary payments to volunteers as well as their intrinsic motivation have roles

3 For a survey see Hackl et al. (2007).

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140DAMIANO FIORILLOAnnals of Public and Cooperative Economics C 2011 CIRIEC

in the real-life decision to offer volunteer work. However, a crowd-out effect is not found. Indeed, monetary rewards directly increase volunteer hours, by means of a relative price effect, and indirectly decrease them negatively influencing intrinsic motivation. Nevertheless, as the overall effect is positive (though not statistically significant), volunteers who are intrinsically motivated and who get monetary rewards supply more volunteer hours than those who are intrinsically motivated but who are not monetarily rewarded.The paper is structured as follows. Section 2 briefly summarizes previous empirical studies on voluntary labour, taking into account both intrinsic and extrinsic motivations. Section 3 presents empirical hypotheses to be tested. Section 4 describes the data while Sections 5, 6 and 7 show the econometric analyses. The last Section concludes.

2 Motivations in existing empirical studies on voluntary labour

The motivational reasons to explain volunteering are classified into two groups. One group focuses on internal rewards due to intrinsic motivation originating from helping others per se. According to cognitive social psychology (Deci 1971: 105) one is said to be intrinsically motivated to perform an activity when one receives no apparent reward except the activity itself . The other group of motives considers the increase in utility due to extrinsic rewards from volunteering: people volunteer instrumentally in order to receive a by-product of volunteer work (Hackl et al. 2007, Meier and Stutzer 2008).Meier (2007) distinguishes two subcomponents of intrinsic motivation4 .

(1) People care about the recipients utility. Due to pro-social preferences, peoples utility increases either if other people are better-off or if inequality between persons diminishes (see Meier 2007).(2) Volunteers enjoy their work per se and intrinsically benefit from the act of volunteering (Deci 1975, Frey 1997, Andreoni 1990). People enjoy doing the required task in itself and they receive a warm glow from contributing time to the provision of a public good. The knowledge of contributing to a good cause is internally self-rewarding. Empirical evidence may be found in Menchik and Weisbrod (1987), Vaillancourt (1994), and Day and Devlin (1996). This view was recently borne out by Carpenter and Myers (2007), Cappellari et al. (2007), and Bruno and Fiorillo (2009).

Meier and Stutzer (2008) underline two reasons for which voluntary work is extrinsically rewarding. First, volunteering can be undertaken as an investment in human capital. Individuals engage in volunteer activities to raise future earnings on the labour market. This reason is supported empirically by Menchik and Weisbrod (1987), Vaillancourt (1994), Day and Devlin (1996, 1998), Hackl et al. (2007) and Fiorillo (2009a).

4 Although different concepts for altruism are provided in the literature, in the present paper altruism is considered an intrinsic motivation. For a different point of view see Chantal and Vallerand (2000).

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MONETARY REWARDS AND THE MOTIVITATION OF VOLUNTEERS141Annals of Public and Cooperative Economics C 2011 CIRIEC

(2) People can volunteer in order to invest in social networking. Through engage- ment in unpaid work, social contacts evolve which can be valuable for getting employment. Employees, for example, may volunteer not only because they enjoy helping others, but also because they wish to signal their good traits and at the same time make valuable social contacts useful for their career.

Volunteers may also enjoy social interaction without the expectations of an extrinsic reward in the future. In this case, meeting people and making friends is a gratification per se. This vision is supported by Prouteau and Wolff (2004, 2008) and Fiorillo (2009b).Few papers have sought to consider both the intrinsic and extrinsic motivations for volunteering. Frey and Go tte (1999) estimate the impact of extrinsic monetary compensation on the supply of voluntary labour in Switzerland. They assume both intrinsically and extrinsically motivated individuals who volunteer in the political sector. In their theoretical model the choice of supplying voluntary work derives from a comparison of benefits and costs. Both are a function of the time spent volunteering and of the direct reward. Two opposing effects are at work when the financial compensation to voluntary labour increases. On the one hand, monetary payment reduces the opportunity costs of volunteering; on the other, it undermines the marginal utility of volunteering, so the net effect is theoretically indeterminate in sign. Empirical findings show that monetary rewards reduce voluntary labour supply (crowding-out effect according to the authors)5 .Cappellari and Turati (2004) apply a modified framework of Frey and Go ttes model also to consider the hourly wage of volunteers already employed. They assume different types of individuals, from intrinsically to extrinsically motivated individuals who volunteer in the social services, in the political sector and in union activism. In the theoretical model the choice of supplying voluntary work derives from a comparison of benefits and costs. They stem, respectively, from the intrinsic and extrinsic motivations of the agent. Both are a function of the time spent volunteering, of the direct reward to volunteering and of the forgone hourly wage rate. Theoretical analysis shows that a change in the direct reward and in the exogenous wage rate exerts contrasting effects on the marginal benefits and the marginal costs of volunteering: while an increase in the former lowers both marginal benefits and costs, an increase in the latter raises them together. Therefore, apart from purely extrinsically and intrinsically motivated individuals, a change in the direct reward and the exogenous wage rate produces an effect on volunteering which is indeterminate in sign. Empirical findings show that extrinsic motivation6 prevails

5 In the paper financial compensation, monetary reward and monetary payment are used as synonyms.6 Cappellari and Turati identify intrinsic motivation from a question in which individualsare asked to rank a set of values. Intrinsic motivation is a dummy which equals 1 for individuals who ranked solidarity as the most important value. Extrinsic motivation is captured by a question in which respondents are asked to indicate what would be their most important reason to change job. Extrinsic motivation is a dummy of 1 if salary is the reason to change job.

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for those volunteering in the social services and political associations, while intrinsic motivation dominates the decision to volunteer in trade unions7 .

3 Empirical hypotheses

In the field of labour supply in the voluntary sector, Frey and Go tte (1999) and Cappellari and Turati (2004) provide theoretical models to evaluate how monetary rewards influence the amount of unpaid labour. This is done in a principal-agent relationship. The volunteer in the role of agent chooses the optimal amount of work effort. The manager as the principal of the respective non-profit organization offers monetary rewards to influence the supply of unpaid labour. I build simple frameworks on theoretical models provided by the above authors. However, unlike these studies and according to my particular data set, I consider three types of individuals: i) those who get monetary rewards but who are not intrinsically motivated; ii) individuals who are intrinsically motivated but who do not get monetary incentives; iii) those who are intrinsically motivated and who get monetary payments. My aim here is to characterize the behavioural responses of the volunteer to changes in intrinsic motivation (M) and monetary rewards (R), in order to provide empirical hypotheses for econometric analysis.As is standard in economics, the choice of whether or not to supply labour derives from a comparison of benefits and costs. In particular, I assume that the utility U(V, M) of volunteering depends on hours volunteered V and on intrinsic motivation M, while the cost C(V, R) of volunteering depends on hours volunteered V and on direct rewards R made to volunteer. Utility function U(.) and cost function C(.) show standard properties: marginal benefit is decreasing (UV > 0, UVV < 0), whereas marginal cost is increasing (CV > 0, CVV > 0)8 . Of course, a rational individual chooses the amount of volunteering V that maximizes his/her net benefit, by equatingmarginal utility with marginal disutility of unpaid work: UV CV = 0.I study how changes in M and R affect optimal choice V . To begin with, Iconsider intrinsically motivated agents who receive no monetary rewards (M > 0, R = 0), and examine the behavioural response of the agent to an increase in his/her motivation. The optimal supply of volunteering V changes according to (by theenvelope theorem):

dVUVV dM + UVM = 0 (1)

7 Carpenter and Myers (2007), following the model of prosocial behaviour developed by Be nabou and Tirole (2006), use a framework in which the agent is motivated by altruistic preferences, extrinsic monetary incentives and reputational concerns. With data on voluntary firefighters in Vermount, the authors find that altruism and concerns about reputation are positively associated with the decision to volunteer. Monetary incentives, measured by stipend, show a positive effect on volunteering but decline with reputational concerns, supporting a prediction that extrinsic incentives can crowd out prosocial behaviour.8 Throughout the paper I use Ui to denote partial derivatives with respect to the ithvariable U/ i. I further assume that UM > 0 and CR < 0.

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144DAMIANO FIORILLO

which may be rearranged into

dV

UVM

(2)dM = UVV

Since the denominator is negative (UVV < 0), the sign of dV/.dM depends onthe sign of UVM , i.e. on the effect of intrinsic motivation on the marginal utility of

dMvolunteering. If UVM > 0, volunteer labour supply increases, dV

> 0. This is theintrinsic motivation effect.

A possible explanation for the intrinsic motivation effect is provided by Deci and Ryan (2000c). They observe that in humans, intrinsic motivation is not the only form of motivation, [.. .], but it is a pervasive and important one. From birth onward, humans, in their healthiest states, are active, inquisitive, curious, and playful creatures, displaying a ubiquitous readiness to learn and explore, and they do not require extraneous incentives to do so. This natural motivational tendency [.. .] is not limited to childhood, but is a significant feature of human nature that affects performance, persistence, and well-being across lifes epochs (Ryan and Deci 2000c:56).

To continue, I consider agents who get monetary incentives but who are not intrinsically motivated (M = 0, R > 0). Assume that the non-profit organizationincreases R. Changes in monetary rewards have the following impact on voluntary labour:

and rearranging

dV0 = CVV dR + CVR (3)dV

CVR

(4)dR = CVV

Since the denominator is positive (CVV > 0), the sign of dV/.dR depends onthe sign of CVM , or on the effect of the monetary incentives on the opportunity cost

dRof volunteering. If CVR < 0, volunteer labour supply increases, dV

> 0. This is therelative price effect highlighted by Frey and Go tte (1999) and Cappellari and Turati(2004): an increase in monetary rewards raises voluntary labour supply because it lowers the opportunity cost of volunteering (CVR < 0)9 .Let us now consider intrinsically motivated agents who get monetary payments (M > 0, R > 0). In this case the utility function U(V, M, R) of volunteering also depends on monetary rewards R made to volunteer. In this framework changes in R influence intrinsic motivation M. Thus, suppose that the non-profit organization increases R. Changes in monetary incentives have the following impact on voluntary labour (by the envelope theorem):dM dV dVUVR + UVM dR + UVV dR = CVR + CVV dR (5)

9 Suppose that a volunteer chooses unpaid work instead of paid work. Thus, the opportunity cost of volunteering is the wage loss, and it is really high. If the individual gets some monetary payments for voluntary work his/her opportunity cost of volunteering clearly decreases.

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MONETARY REWARDS AND THE MOTIVITATION OF VOLUNTEERS145

which may be rearranged intodV

UVR CVR

UVM dM

(6)dR = CVV UVV +

CVV UVV dR

The second term of (6) shows the effect of monetary rewards on intrinsic motivation, with dM/.dR 0 or dM/.dR 0. Given that the denominator is positive,the sign of expression (6) rests on UVR , CVR and dM/.dR. When they differ from zero, the sign of expression (6) is undetermined.

Two special cases may be highlighted. The first is the crowding-out effect emp- hasized by Frey and Go tte (1999) and Cappellari and Turati (2004), which occurs when an increase in monetary rewards reduces the opportunity cost of volunteering (CVR < 0) and the marginal utility of volunteering (UVR < 0) with UVR dominating CVR . Furthermore, the effect of monetary rewards on intrinsic motivation is negative, i.e. dM/.dR < 0. Thus, an increase in monetary rewards reduces voluntary labour supply:

dV dR = (0)( 0. As a result, an increase in monetary rewards raises voluntary labour

dRsupply: dV = (>0) + (>0)(>0) = (>0).In the crowding-out effect, a feasible interpretation of UVR < 0 is provided by Cappellari and Turati (2004) who observe that individuals feel their relation with a nonprofit organization is becoming more market-oriented. When voluntary labour isprovided and R = 0 individuals recognize a nonmarket transfer; as soon as R becomespositive, the framework changes and individuals refer to a market-type transaction(Cappellari and Turati 2004: 626). According to Frey and Go tte (1999) little is known how the crowding effect varies with size of rewards. It seems plausible that sufficiently intrinsically motivated individuals switch to a different mode to supply volunteering as monetary rewards increase. Individuals may perceive low levels of rewards as a sign of recognition for their interest in voluntary work. Hence, it is reasonable to assume that CVR dominates UVR . But as the level of monetary incentives rises, the hidden costs of reward tend to be created and intrinsic motivation to be damaged (Frey 1992). Thus, it is rational to presume that UVR dominates CVR .Explanations of the crowding-out effect are given by Frey and colleagues. Frey and Oberholzer-Gee (1997: 747) observe that if a person derives intrinsic benefits simply by behaving in an altruistic manner or by living up to her civic duty, paying her for this service reduces her option of indulging in altruistic feelings. Her intrinsic motivation then has a reduced effect on supply. There is a psychological process which underlies this phenomenon. When individuals perceive an external intervention to be controlling their intrinsic motivation to perform, the task diminishes. Frey and Go tte (1999) point out that people who are paid to perform a task which they did previously for its own sake (i.e. they are intrinsically motivated) reduce their effort. This effect appears when compensation is perceived to be controlling, i.e. reducing a volunteers feeling of self-determination. Frey and Jegen (2001) consider two psychological conditions under which the crowd-out effect appear, namely: 1) Impaired


Table 1 Empirical hypotheses to be tested

Effect Proxy Expected sign

Relative priceMonetary rewards+

Intrinsic motivationIntrinsic motivation+

Monetary rewards intrinsic motivation

Crowding-outMonetary rewards plus Monetary rewards intrinsic motivation

self-determination. When individuals perceive monetary rewards as reducing their self-determination, intrinsic motivation is substituted by extrinsic control. Individuals who are forced to behave in a specific way by outside intervention feel overjustified if they maintain their intrinsic motivation. 2) Impaired self-esteem. When outside intervention carries the notion that the actors motivation is not recognized, his or her intrinsic motivation is effectively rejected. The person affected feels that his or her involvement and competence is not appreciated, which debases its value. An intrinsically motivated person is deprived of the chance of displaying his or her own interest and involvement in an activity when someone else offers a reward. As a result of impaired self-esteem, individuals reduce effort. Monetary rewards crowd out intrinsic motivation if the individuals affected perceive them to be controlling. In that case, both self-determination and self-esteem suffer, and the individuals react by reducing their intrinsic motivation in the controlled activity10 .In order to provide empirical hypotheses, the results of this Section can be summed up as follows: 1) individuals who get a monetary reward but are not intrinsically motivated, supply more volunteer labour (compared to those who are not monetarily rewarded). 2) Individuals who are intrinsically motivated but do not get monetary incentives, offer more unpaid work (compared to those who are not intrinsically motivated). 3) People who are intrinsically motivated and who get a monetary payment supply less voluntary work (compared to those who are intrinsically motivated and do not get a monetary reward), if a crowding-out effect operates.Empirical hypotheses. In the empirical analysis, the data set gives information on monetary rewards and intrinsic motivation. Thus the following hypotheses can be derived (summarized in Table 1): i) the coefficient of the proxy of monetary rewards is to be expected positive and significant; ii) the coefficient of the proxy of intrinsic motivation is to be expected positive and significant; iii) the coefficient of proxy obtained by multiplying intrinsic motivation by monetary rewards is expected to be negative and significant while iv) the overall effect i) plus iii) is expected to be negative (this means that the crowding-out effect is working).

4 Data set and descriptive statistics

The empirical analysis is based on the Survey on Employment in the SocialCare and Educational Services conducted by the Italian Foundation for Voluntary

10 A similar argument is recalled by Grepperud and Pedersen (2006, 126). For alternative interpretations see Cappellari and Turati (2004: 626627).

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Service (FIVOL-FEO) on public (PO), for-profit (FPO) and non-profit (NPO) organizations operating in the supply of a limited number of personal facilities: assistance and guardianship, nursing/rehabilitation, educational, cultural, recreational, school and school-to-work guidance, job-search assistance and others (see Borzaga 2000, for more details). The survey was carried out in the first semester of 1998 in 15Italian provinces11 , mainly concentrated in the North, where non-profit organizations are more numerous12 . In all, 724 voluntary workers returned the questionnaire filled out13 . About 78 percent of unpaid workers in the volunteer sample were in NPOs, including 33 percent in religious organizations, 21 percent in the POs and 1 percent in FPOs.One of the main advantages of this data set is that it provides direct, detailed information on time spent in volunteering, on the degree of volunteer motivations and on monetary incentives, which the framework outlined in the previous section considers key factors to account for volunteer effort.The FIVOL-FEO data set has questions dealing with time spent volunteering, volunteer motivations and monetary incentives. First of all, the survey asked individuals how often they offered voluntary work in the organization and how many hours they devoted to volunteering. Based on these questions, I use only regular unpaid labour (hours per week) as the sample of volunteers. Second, volunteers were asked the question: Did you receive a reimbursement for your activity? The answers were: 1) no; 2) a lump-sum reimbursement; 3) reimbursement of expenses incurred and documented14 . I excluded response (3) because such payments are meant to compensate for expenses incurred by volunteers in the course of their unpaid tasks, such as the use of their cars or attendance at certain meetings15 . I regard response (2) as monetary incentives and hence as monetary rewards. This direct payment to volunteers is made simply for their presence in unpaid work, irrespective of the expenses actually incurred and documented. This type of reimbursement might be comparable to hourly payments in paid work. Volunteers are paid for being on the job. Therefore, such payments could exceed the costs of participation in voluntary activities. As a result, I create a dummy for monetary rewards, assuming the value 1 if a volunteer receives lump-sum reimbursements for their activity and 0 otherwise.

11 From North to South, they include: Trento, Gorizia, Pordenone, Trieste, Udine, Venezia, Cuneo, Torino, Brescia, Firenze, Napoli, Salerno, Catanzaro, Reggio Calabria and Messina.12 For each type of service, the universe of production units operating in each province wascounted, and the chosen organizations were selected from among those providing continuous service production that had been established for at least four years. The sample was drawn ensuring adequate representation of each type of organization. Within each organization, if the number of staff exceeded 20 units, a sample of 10 volunteers was selected; otherwise, they were all included in the sample.13 All the questionnaires were self-completed, whenever possible, at the place of work, andin the presence of a trained interviewer.14 While Frey and Go tte (1999) used the question: Did you receive financial compensationsfor this activity? Do not count reimbursements, they observed that the political sector is the one where financial rewards or reimbursements are most prevalent. This observation could indicate that, for the authors, reimbursements are monetary compensations.15 I would like to thank the anonymous referees for helpful suggestions regarding thisissue.

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Third, regarding attitudes towards volunteering, the FIVOL-FEO data set asked respondents the question Volunteering is for me.. .. The answers candidate for intrinsic motivation were: i) an opportunity to help others; ii) a moral duty; iii) an opportunity to fulfil oneself. The answers were scored on a scale from 1 (disagree) to 7 (agree). Overall, 95 percent of regular volunteers cited at least one of these three attitudes. The most frequent attitude reported is an opportunity to help others, followed, in descending order, by moral duty and an opportunity to fulfil oneself. According to the definition of intrinsic motivation, it is volunteer work itself and the related rewards that motivate people to donate their labour. Among these rewards, there is the strengthening of ethical or social norms, or simply a warm glow from having done something good (Ziemek 2006: 535). Thus, following Ziemek (2006), I consider moral duty as an intrinsic motivation variable16 , which takes the value of 1 if individuals agree that voluntary work is a moral duty17 .While the paper focuses on the role played by monetary rewards and intrinsic motivation, these are by no means the only determinants of voluntary work. Indeed, given the richness of the FIVOL-FEO data set it was possible to include in the analysis some variables regarding the type of organization, the activity in which the volunteer offers his/her services, vocational qualification, voluntary experience as well as volunteering of parents. The literature on volunteering also provides clear guidance as to the other variables that affect time donation. Such determinants include a host of personal and human characteristics age, sex, marital status, educational level, occupational status plus the region of residence.Table 2 lists all the variables used in this analysis and gives their definitions. Table 3 provides sample averages of each determinant of regular voluntary work. The sample of regular volunteers includes 534 observations. Approximately, on average,10 hours per week are devoted to regular voluntary labour in the social services. Nine percent of respondents receive monetary compensation, while 57 percent of regular volunteers display an intrinsic motivation. Over half the respondents are female and single. Half the sample have a high school education (reference group) while only20 percent were educated beyond high school. The largest group of individuals (34%) is aged 21 to 30, followed by individuals aged 31 to 40 and more than 61 (both 16% of the sample). Half the sample comprises students, housewives and the retired18 .

16 Suppose that an individual volunteers because he/she agrees that volunteering is a moral duty. Other individuals will benefit from the consumption of goods and services provided by the voluntary work of the individual. Thus, the individual volunteers for the benefit of others, without receiving anything in return apart from the benefit of giving per se. Therefore, individuals who agree that unpaid labour is a moral duty probably also agree that their voluntary work is an opportunity to help others and an opportunity to fulfil oneself . Indeed, the moral duty variable is highly correlated with the other two variables.17 From a conceptual point of view, Chantal and Vallerand (2000: 481) use the termRe gulation Introjecte e Altruiste for the intrinsic motivation by which le be ne vole se conformea` des obligations morales auto-impose es (parce que je ressens une obligation morale a`mimpliquer dans le be ne volat) in volunteering labour supply.18 These descriptive statistics on personal characteristics are quite similar to the same datasummary drawn from the 1997 ISTAT (the Italian National Statistics Office) Multipurpose Household Survey on everyday life issues, which presents a representative data set of the Italian volunteer population. Differences of around 10 percent emerge for the following variables: female, single, high school and employed.

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Table 2 Variable definitions

Variable Definitions

Dependent variablesHours per week Number of hours of volunteer labour per weekIndependent variablesKey variablesMonetary rewards Dummy, 1 if volunteer receives lump-sum reimbursements for voluntary labour; 0 otherwiseIntrinsic motivation Dummy, 1 if volunteer agrees that voluntary work is a moral duty;0 otherwiseIndividual characteristicsFemale Dummy, 1 if female; 0 otherwiseMarried Dummy, 1 if married; 0 otherwise. Reference groupSingle Dummy, 1 if single; 0 otherwiseDivorced/widowed Dummy, 1 if divorced and/or widowed : 0 otherwiseAge 1620 Dummy, 1 if age is between 16 and 20; 0 otherwise. Reference groupAge 2130 Dummy, 1 if age is between 21 and 30; 0 otherwise Age 3140 Dummy, 1 if age is between 31 and 40; 0 otherwise. Age 4150 Dummy, 1 if age is between 41 and 50; 0 otherwise Age 5160 Dummy, 1 if age is between 51 and 60; 0 otherwiseAge 61+ Dummy, 1 if age is equal to 61 and above; 0 otherwiseEducational levelElementary school Dummy, 1 if elementary school or no education; 0 otherwiseJunior High school Dummy, 1 if compulsory education; 0 otherwiseHigh school Dummy, 1 if high school graduates; 0 otherwise. Reference groupUniversity Dummy, 1 if university degree and doctorate; 0 otherwiseVocational qualification Dummy, 1 if specific qualification to perform welfare and educational servicesOccupational statusEmployed Dummy, 1 if volunteer is employed; 0 otherwise. Reference groupUnemployed Dummy, 1 if volunteer is unemployed; 0 otherwise Student Dummy, 1 if volunteer is a student; 0 otherwise Housewife Dummy, 1 if volunteer is a housewife; 0 otherwise Retired Dummy, 1 if volunteer is retired; 0 otherwiseMilitary/Objector Dummy, 1 if volunteer is in military service and/or a conscientious objector; 0 otherwiseOther professional condition Dummy, 1 if volunteer is in another professional condition; 0 otherwiseVolunteer activitiesCoordination Dummy, 1 if volunteer is involved in coordination/responsibility;0 otherwiseManagement Dummy, 1 if volunteer is involved in management; 0 otherwise Service supply Dummy, 1 if volunteer is involved in service supply; 0 otherwise Support Dummy, 1 if volunteer is involved in support activity; 0 otherwise Other activities Dummy, 1 if volunteer is involved in other activities; 0 otherwise.Reference groupTypes of organizationPublic Dummy, 1 if the type of organization is public; 0 otherwiseFor-profit Dummy, 1 if the type of organization is private for-profit; 0 otherwiseLay non-profit Dummy, 1 if the type of organization is non-religious private non-profit;0 otherwiseReligious non-profit Dummy, 1 if the type of organization is religious private non-profit;0 otherwise. Reference groupPublic/Private Dummy, 1 if the type of organization is mixed (public/private); 0 otherwise

Continued

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Table 2 Continued

Variable Definitions

Other independent variablesEmployed in social services Dummy, 1 if volunteer is employed in welfare and educational services;0 otherwiseVolunteer experience Number of years of volunteering experienceTraining Dummy, 1 if volunteer participated in educational experiences supported by the organizationVolunteering of father/mother Dummy, 1 if parents are volunteers; 0 otherwiseContinue volunteering Dummy, 1 if volunteer could keep on voluntary work in future; 0 otherwiseMacro-regionsNorth-West Dummy, 1 if volunteer resides in North-West; 0 otherwise.Reference groupNorth-East Dummy, 1 if volunteer resides in North-East; 0 otherwiseCentre Dummy, 1 if volunteer resides in Centre; 0 otherwiseSouth Dummy, 1 if volunteer resides in South and Islands; 0 otherwise

Interestingly, 14 percent of respondents have a vocational qualification, 34 percent have participated in educational training supported by the organization and, on average, individuals have done five years of volunteering. Furthermore, nine percent of individuals give unpaid work because of family connections, while 96 percent of them intend to keep on volunteering in the future.Substantial differences may be observed among the type of volunteer activity and the type of organization, as revealed by Table 3. Indeed, 65 percent of respondents offer unpaid work in the provision of the service (in direct contact with recipients), followed by the support activity (not in direct contact with recipients) with 24 percent of the sample. Volunteer labour is supplied by 32 percent of respondents in the religious non-profit (reference group), followed by lay non-profit and public organizations (both 24% of the sample). Finally, the largest group of individuals (31%) lives in the North-East regions.Simple correlations among the number of hours supplied, intrinsic motivation and monetary rewards are shown in Table 4. There appears a high positive correlation between monetary rewards and hours per week. Very low correlations emerge between intrinsic motivation and hours per week (with positive sign) and between monetary rewards and intrinsic motivation (with negative sign).

5 Empirical results

A simple way to assess the empirical hypotheses of Section 3 is by means of OLS equations with which voluntary hours are regressed against the set of controls plus monetary rewards, intrinsic motivation and the combined variableVi = Xi + Ri + Ii + Ri Ii + i (7)

where Vi are hours of volunteer labour, Xi is the matrix of explanatory variables, Riis the vector of the monetary payments, Ii is the vector of the intrinsic motivation,

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Table3 Data summary

Regular volunteer work

VariableObs.MeanSD

Hours per week5069.399.98

Monetary rewards5180.090.29

Intrinsic motivation5070.570.49

Monetary rewards intrinsic motivation4950.050.22

Female5310.630.48

Single5310.530.49

Divorced/widowed5310.070.25

Age 21305340.340.47

Age 31405340.160.37

Age 41505340.130.34

Age 51605340.150.36

Age 61+5340.160.37

Elementary school5310.050.23

Junior High school5310.180.39

University5310.200.40

Vocational qualification5200.140.34

Unemployed5230.120.32

Student5230.180.39

Housewife5230.150.35

Retired5230.210.40

Military/Objector5230.030.16

Other professional condition5230.040.19

Employed in social services5250.070.25

Volunteer experience5344.854.43

Coordinationa5290,110.32

Managementa5290.030.17

Service supplya5290.650.48

Supporta5290.240.43

Training5140.340.47

Public5340.240.43

For-profit5340.010.06

Lay non-profit5340.240.43

Public/Private5340.180.38

Volunteering father/mother5280.090.29

Continue volunteering5300.960.19

North-East5340.310.46

Centre5340.140.35

South5340.280.45

Note: a The sum is greater than 100 percent because respondents were allowed to report more than one activity.

Table 4 Correlations

Regular volunteer work

Hours per weekMonetary rewardsIntrinsic motivation

Hours per week1.00

Monetary rewards0.251.00

Intrinsic motivation0.010.021.00

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Table 5 OLS estimates for regular volunteer work

Hours per week

VariableIIIIII

Monetary rewards0.535(0.287)0.760 (0.280)0.753 (0.265)

Intrinsic motivation0.167 (0.065)0.313 (0.070)0.210 (0.055)

Monetary rewards Intrinsic motivation0.397(0.276)0.372(0.252)

Female0.075(0.058)0.070(0.058)0.054(0.060)

Single0.192(0.132)0.195(0.134)0.244(0.142)

Divorced/widowed0.293 (0.071)0.285 (0.070)0.210 (0.060)

Age 21300.092(0.136)0.087(0.120)0.092(0.114)

Age 31400.100(0.118)0.087(0.120)0.045(0.130)

Age 41500.334 (0.132)0.317 (0.130)0.360 (0.144)

Age 51600.284(0.165)0.259(0.157)0.251(0.152)

Age 61+0.181(0.194)0.153(0.191)0.133(0.183)

Elementary school0.124(0.129)0.116(0.127)0.048(0.126)

Junior High school0.218(0.102)0.236 (0.103)0.267 (0.100)

University0.351 (0.102)0.362 (0.101)0.386 (0.097)

Vocational qualification0.148(0.120)0.139(0.120)0.103(0.111)

Unemployed0.285 (0.107)0.282 (0.108)0.299 (0.102)

Housewife0.135(0.108)0.148(0.107)0.237(0.112)

Student0.223(0.165)0.217(0.165)0.246(0.153)

Retired0.343 (0.131)0.361 (0.132)0.442 (0.121)

Military/Objector1.726 (0.229)1.718 (0.230)1.735 (0.194)

Other professional0.845 (0.326)0.879 (0.330)0.906 (0.327)

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condition

Volunteer experience0.029 (0.007)0.028 (0.008)0.020 (0.007)Coordination0.385 (0.112)Management0.239(0.230)Service supply0.263 (0.101)Support0.060(0.093)Training0.139(0.100)0.132(0.099)0.128(0.094)Employed in social services

0.188 (0.113) 0.213 (0.117) 0.188 (0.134)

Public 0.103 (0.131) 0.089 (0.141) 0.060 (0.112) For-profit 0.480 (0.332) 0.483 (0.336) 0.764 (0.369)

Lay non-profit0.089(0.128)0.086(0.131)0.038(0.119)Public/Private0.012(0.160)0.016(0.156)0.010(0.146)Volunteering of0.349 (0.127)0.353 (0.128)0.327 (0.128)father/motherNorth-East0.388 (0.174)0.393 (0.177)0.458 (0.142)Centre0.237(0.145)0.254(0.148)0.339 (0.133)South0.773 (0.197)0.760 (0.185)0.799 (0.166)No. obs.436436434R20.380.380.42Continue volunteering 0.564 (0.216) 0.582 (0.220) 0.587 (0.193)

Notes: Dependent variables in natural logarithms of hours per week. The independent variables are described in table 2. Standard errors (in brackets) are corrected for heteroskedasticity and clustering of residuals at provinciallevel. The symbols , , denote significance at the 1, 5 and 10 percent levels respectively.

Ri Ii is the combined term and i captures the unobservables. The set of controls included in Xi corresponds to the variables listed in Table 2.

The results of the estimates of (7) for regular volunteer labour supply are given in Table 5 columns (1)(3), which also shows the standard errors (in brackets)


corrected for heteroskedasticity and the provincial clustering of residuals. The empirical hypotheses are tested by [looking at] the sign and the statistical significance of the coefficients of monetary rewards, intrinsic motivation and the combined term.The results presented in Table 5 indicate the statistical importance of monetary rewards and intrinsic motivation to regular volunteering, ceteris paribus. We see a positive correlation between regular time donation and monetary payments, statistically significant at 5 percent, and a positive correlation between hours per week and intrinsic motivation, statistically significant at 1 percent (Column 3). The former indicates that as voluntary labour is rewarded monetarily, an increase in its rate raises the number of hours per week supplied, because the opportunity cost of volunteering decreases. The latter shows that as volunteers are intrinsically motivated, i.e. they supply voluntary work for non-tangible rewards, such as moral duty, an increase in their intrinsic motivation raises the number of hours per week supplied too, because the marginal utility of volunteering increases. However, on examining the findings in Table 5, monetary incentives have a greater impact on regular time donation than intrinsic motivation. Moreover, the coefficient on monetaryrewardsintrinsic motivation variable is not significant. The null hypothesis that theintrinsic motivation differential does not depend on monetary rewards is not rejected.Thus, this finding seems to neglect a crowding-out effect.

Let us now examine the other determinants of regular labour supply. Italian women and men do not show a statistically significant difference in regular volunteering. Marital status appears to be important: divorced/widowed is associated with a high statistical significance to hours per week. Thus divorced/widowed people do more regular unpaid work than the married (reference group), which suggests that people who have suffered a traumatic event do not reduce their social life. Rather, volunteering could be a way in which people share and overcome their traumatic experiences.In Table 5, the coefficients of the age dummy appear to indicate a non-linear relationship between age and regular unpaid labour. The number of hours per week increases with age up to the 4150 group (significant at 1%), and then declines (Column 3). Thus the relation between regular volunteering and age therefore seems an inverted U-shape. The result appears consistent with the previous empirical studies on volunteering (Menchik and Weisbrod 1987, Day and Devlin 1996, Prouteau and Wolff 2008).19Through Columns (13), it emerges that the number of regular volunteering hours increases and then decreases with education. People with no more than compulsory schooling (junior high school) do significantly less volunteer work than high school-leavers (reference group), and university graduates do significantly less as well. This result is consistent with the findings of Prouteau and Wolff (2008)

19 In previous empirical studies on volunteering, in which the data set included volunteers and non-volunteers, I interpreted this finding as evidence of an investment model (extrinsic motivation), i.e. individuals engage in volunteer activities so as to raise future earnings on the labour market. Under this approach, investment in volunteering should decline in older age groups since the period during which the investment will produce market returns is shorter. For more details, see Fiorillo (2009a).

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who find that the probability of volunteering is higher for respondents with an intermediate level of education. However, in the literature on volunteer hours, Menchik and Weisbrod (1987) find that volunteer hours decrease with level of education, while Freeman (1997) and Apinunmahakul and Devlin (2008) show the contrary: volunteering rises as the individual becomes more educated. If we regard education as a proxy of earnings, university graduates do less regular unpaid work because their opportunity cost of time is high. However, this explanation does not apply to those with compulsory schooling: as they have a low opportunity cost of time they might have done more voluntary work. Anyway, since I control for employment status, the evidence implies that the effect of education on regular volunteering is not simply determined by education being a proxy of wages. Further explanations may be provided by the literature on social capital. Accordingly, education is related not only to human capital but also to social capital (social networks) as well. Better education increases civic values and the awareness that, through commitment and cooperation, positive benefits may be achieved (Gleaser et al. 2002, Iyer et al. 2003). More public-minded and aware citizens foster the development of social capital. These explanations seem to apply to the finding regarding the positive impact of junior high school education on regular time donation (in social organizations).20Unemployed and retired people have a positive and significant effect (at 5%) on the dependent variable. These people undoubtedly have more time to devote to volunteer activities. The military/objector variable also has a positive and highly significant effect (at 1%). The latter result comes as no surprise given that in Italy until 2004 males aged 18 were allowed to choose compulsory civilian service as a substitute for compulsory military service by declaring they were conscientious objectors. Compulsory civilian service was performed in organizations of social utility, that is in the types of organization covered by the present paper.The role of parents in regular time donation emerges as important but with unexpected sign (Table 5). If the respondents parents are engaged in volunteer activities, this has a negative impact on labour supply. To account for volunteering hours Menchik and Weisbrod (1987) included a variable indicating whether or not the respondents parents contributed regularly to charitable organizations and made a similar finding.Let us now analyse the determinants of volunteering neglected elsewhere. A vocational qualification to perform social services does not seem to increase regular volunteer work while a volunteer experience does. This last result indicates that the past behaviour of individuals is clearly important in regular labour supply. The fact that the coefficient of the vocational qualification variable is positive but insignificant might still indicate that a vocational qualification increases volunteer work. However, there is so much noise around this effect that the coefficient does not become significant. According to Freeman (1997) the specific activity the individual is engaged in could supply more exhaustive explanations, hence my inclusion of the activities carried out in social organizations in Table 5 Column 3. Coordination is positive and highly significant (at 1%) while the variable concerning the direct contact of regular volunteers with those they assist (service supply) is negative and significant

20 However, for all other groups (elementary and university) the coefficients do not support those arguments.

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(at 5%). The latter result may indicate that social services in the organization are supplied mainly by paid workers. Interestingly, the training variable, indicating whether volunteers participated in vocational training supported by the organization, is not statistically significant. This suggests that accumulation of human capital (extrinsic motivation) is no reason for volunteers to supply unpaid regular labour.People who intend to keep on volunteering in the future offer less regular unpaid work. This may indicate that such people are unlikely to supply unpaid work regularly, perhaps because their opportunity cost is high. In addition, individuals engaged in for-profit organizations supply more volunteer hours. In the first case, the relative variable is negative and highly significant; in the second the variable is positive and significant only at 10 percent. Finally, the estimates for macro- regional dummies indicate that people who live in southern Italy supply more regular volunteer labour than in North-West Italy, the reference group, but also with respect to the other macro-regional areas. This evidence is interesting because previous empirical studies on volunteering and social capital (members in non-profit organizations) found the opposite results.21

6 Sensitivity analysis

A common feature of the empirical literature on volunteer labour supply is the use of a cross-sectional data set, in which the problem of unobservable variables, correlated with an error term, may be particularly severe. While I allowed for this problem in the previous section by using a wide range of individual control variables in estimating equation (7), in this section I include other variables at the same time as monetary rewards, intrinsic motivation and combined term, with a view to testing the robustness of previous results. This is done in Table 6 Columns (1) (4). The inclusion of such supplementary variables does not alter the estimates on monetary rewards and intrinsic motivation. As the table documents, the coefficients on monetary rewards and intrinsic motivation variables are remarkably stable and highly significant throughout, irrespective of which variable is included.I first include an asked22 dummy to examine whether people supplied volunteer labour because they were asked to do so (Freeman 1997, Apinunmahakul and Devlin2008). The matter would appear of little importance: the coefficient on the asked variable is positive but not statistically significant. Second, following the literature on volunteering and relational goods23 , I take account of a relational motivation variable24 to analyse whether a motive based on relational goods also explains regular volunteer work25 . The coefficient on the relation motivation dummy enters with the right sign but is not significant. Third, I take in other extrinsic motivation variables

21 For more detail see Fiorillo (2008).22 This variable take the value 1 if the individual was asked to become a volunteer by closefriends, relatives and acquaintances.23 See for more detail Prouteau and Wolff (2004, 2008).24 The relational motivation dummy takes the value 1 if the individual agrees thatvolunteering is an opportunity to have new interpersonal relationships.25 The idea is that in doing unpaid work volunteers enjoy interpersonal interactions per sewithout any expectation of an extrinsic reward.

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C 2011 The AuthorAnnals of Public and Cooperative Economics C 2011 CIRIECDAMIANO FIORILLO156

Table 6 OLS estimates for regular volunteer work: robustness analysis with additional variables

VariableIIIIIIIV

Monetary rewards0.735 (0.288)0.735 (0.259)0.711 (0.220)0.751 (0.269)

Intrinsic motivation0.204 (0.059)0.179 (0.057)0.156 (0.056)0.215 (0.063)

Monetary rewards Intrinsic motivation0.357(0.257)0.349(0.254)0.333(0.241)0.370(0.285)

AskedRelational motivation Professional experience RecruitmentIndividual controls0.063

Yes(0.132)0.101

Yes(0.099)

0.225

Yes

(0.088)

0.178

Yes

(0.156)

Macro-regional dummiesYesYesYesYes

No. obs.434430426430

R20.420.430.440.43

Notes: Dependent variables in natural logarithms of hours per week. The individual controls as well as macro-regional dummies are described in table 2. Standard errors (in brackets) are corrected for heteroskedasticity and clustering of residuals at provincial level. The symbols , , denote significance at the 1, 5 and

10 percent levels respectively.

that, as we saw in Section 2, could contribute to explain volunteer hours. These variables are professional experience and recruitment26 . The latter is positive and significant at 5 percent, the former is positive but insignificant.

As another sensitivity test, I consider individuals with low intrinsic motivation and those with high intrinsic motivation27 . From Table 7 Column (1) it emerges that weakly motivated people supply fewer volunteer hours per week than motivated individuals. Column (2) shows that strongly motivated people do not change their volunteer labour supply compared to motivated individuals. Let us now assume that intrinsically motivated individuals get monetary rewards. What would happen? One would expect those with low intrinsic motivation who get monetary incentives to supply more volunteers hours than those weakly motivated and without monetary payments. In this case, as the economic theory suggests, raising monetary rewards would increase supply. By contrast, one would expect individuals with high intrinsic motivation who get monetary compensation to supply fewer voluntary hours than those highly motivated but who do not receive monetary payments. As suggested by the cognitive psychology literature (Deci and Ryan 2000a, b, c), raising monetary rewards would reduce supply. Indeed, this is exactly what happens (see Table 7, Columns 34): volunteer labour supply of weakly motivated individuals increases while that of the strongly motivated decreases (both variables are statistically significant at 10 percent). Thus, since increasing monetary rewards has the opposite sign on voluntary work of individuals with low and high intrinsic motivation, on average, the positive effect offsets the negative, and we do not observe that intrinsically motivated individuals who get a monetary reward work less, as happens in Table 5, Column (3). In other words, we observe that the coefficient on monetaryrewardsintrinsic motivation is statistically insignificant in Table 5.

7 Accounting for endogeneity

The causal interpretation of regression results is generally difficult in the social sciences and is a delicate issue in the present analysis, given the characteristics of the relationship under investigation and the cross-section nature of the data set. Intrinsic motivation, as measured by respondents attitudes towards voluntary service, is potentially endogenous: intrinsic motivation may increase unpaid work, but volunteer labour supply may also positively influence intrinsic motivation. To put it differently, initially an individual may be intrinsically motivated to do voluntary work, such as helping others. Once involved, the tasks performed may be inherently interesting and as such intrinsically motivating.While I have taken into account in previous Sections the possibility that endogeneity may result from omitted variables affecting both dependent and independent variables, in this section I verify the causal interpretations of the results

26 Professional experience is equal to 1 if the individual agrees that volunteering is an opportunity to have professional experience. Recruitment takes the value 1 if the volunteer could be interested in being hired by the organization.27 The low intrinsic motivation dummy is 1 if the volunteer wholly disagrees that voluntarywork is a moral duty; 0 otherwise. The high intrinsic motivation variable is 1 if the volunteer fully agrees that voluntary work is a moral duty; 0 otherwise.

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C 2011 The AuthorAnnals of Public and Cooperative Economics C 2011 CIRIECDAMIANO FIORILLO158

Table 7 OLS estimates for regular volunteer work: robustness analysis with low and high intrinsic motivation

Variable I II III IV

Monetary rewards 0.441 (0.243) 0.603 (0.248) Low intrinsic motivation 0.226 (0.079) 0.243 (0.086)High intrinsic motivation 0.017 (0.065) 0.065 (0.076) Monetary rewards low motivation 0.384 (0.205)Monetary rewards high motivation 0.257 (0.127)Individual controls Yes Yes Yes YesMacro-regional dummies Yes Yes Yes YesNo. obs. 441 441 434 434R2 0.39 0.38 0.42 0.41

Notes: Dependent variables in natural logarithms of hours per week. The individual controls as well as macro-regional dummies are described in table 2. Standard errors (in brackets) are corrected for heteroskedasticity and clustering of residuals at provincial level. The symbols , and denote significance at the 1, 5 and

10 percent levels, respectively.

Table 8 2SLS estimates for regular volunteer work

Variable2SLS

Monetary rewards1.183 (0.204)

Intrinsic motivation0.879 (0.376)

Monetary rewards Intrinsic motivation1.080 (0.437)

Individual controlsYes

Macro-regional dummiesYes

No. obs.415

R20.32

Sargan (p-value)0.73

Wu-Hausman (p-value)0.01

Notes: Dependent variables in natural logarithms of hours per week. Instruments for intrinsic motivation are work is self-fulfilment and I intend to keep on volunteering in this organization in the future. The full set of exogenous variables is described in Table 5 (column 3). Standard errors (in brackets) are corrected for heteroskedasticity andclustering of residuals at provincial level. The symbols , and denote significance at the 1, 5 and 10 percentlevels, respectively.

using instrumental variables (2SLS). Although it is generally quite difficult to find appropriate instruments, I regard as instruments for intrinsic motivation an attitude towards paid work and future intention as regards unpaid work in the organization in which it is carried out. The responses work is a contribution to improve society and I intend to keep on volunteering in this organization in the future are correlated with intrinsic motivation but are not expected to directly influence the current decision to volunteer28 .A range of diagnostic tests may be carried out to assess the validity of these instruments. First, looking at an (unreported) first stage regression of the intrinsic motivation variable on work is a contribution to improve society and I intend to keep on volunteering in this organization in the future as well as the remaining exogenous variables from table 5 (Column 3), it may be observed that the two instruments are both highly significant (p-values 0.00). Second, I conduct a Hausman test comparing OLS and 2SLS estimates and determining whether the differences are statistically significant. The test indicates that the two models are statistically significantly different. It may be concluded, therefore, that the intrinsic motivation variable is endogenous.Finally, I also perform a Sargan test of overidentification under the null hypothesis that the instruments are correlated with the structural error. The Sargan test rejects the null hypothesis supporting the validity of at least one instrument. Taken as a whole, the results suggest that it may be necessary to endogenize intrinsic motivation and I believe that I have appropriate instruments for doing so.Table 8 presents the results of a 2SLS model for regular unpaid work together with Sargan and Wu-Hausman tests (p-value). Since the point is to test the empirical

28 The first instrument is 1 if the individual agrees that work is a contribution to improve society; 0 otherwise. The second take the value 1 if the volunteer is going to carry on with activity in the organization in the future; 0 otherwise, Moreover, while concerned that the product between monetary reward and intrinsic motivation is endogenous, I do not instrument it for problems of multicollinearity.

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hypotheses in Section 3, only the estimates for monetary rewards, intrinsic motivation and the combined term are reported. The presence of monetary rewards is highly positively associated with regular unpaid labour. What is more, the coefficient increases compared to that of Table 5 (Column 3). But, more importantly, the coefficient on the intrinsic motivation dummy rises compared to that of Table 5 (Column 3), it being positive and highly statistically significant. Finally, the coefficient on the interaction term is now negative and statistically significant at 5 percent level.Overall, the results of instrumental variable estimation seem to support the causal interpretation that intrinsic motivation has a positive impact on volunteer hours. What is more, the findings point out that a crowding-out effect does not emerge. Indeed, an increase in the monetary rewards for intrinsically motivated volunteers raises the (log of) hours volunteered by 1.183. This is the relative price effect. Furthermore, the effect of monetary payments on intrinsic motivation is negative (interacted variable). This means that an increase in the monetary rewards decreases volunteer hours of the intrinsically motivated volunteers by 1.080. Hence, the overall effect of the monetary incentives on the (log of) hours volunteered ofthe intrinsically motivated individuals is (1.1831.080 = 0.103) positive (though notstatistically significant). Thus, it seems correct to conclude that a crowding-out effectdoes not emerge: all the estimations (Ordinary Least Squares and InstrumentalVariables) show a positive effect of monetary rewards on hours volunteered.

8 Summary and conclusions

The paper analysed the role of monetary rewards in crowding out intrinsic motivation in regular volunteer labour supply, using Frey and Go ttes original framework. Although several empirical studies point out the importance of intrinsic motivation in unpaid labour supply (Cappellari and Turati 2004, Carpenter and Myers 2007, Cappellari et al. 2007, Meier and Stutzer 2008, Bruno and Fiorillo 2009), the crowded-out function of monetary rewards has received relatively little attention (Frey and Go tte 1999, Carpenter and Myers 2007).Drawing on the Survey on Employment in the Social Care and Educational Services conducted by the FIVOL-FEO this paper evaluated whether monetary rewards to regular volunteers affect their intrinsic motivation. Use of the Ordinary Least Squares method and of the Instrumental Variables method established that intrinsic motivation, measured by moral duty, an attitude towards voluntary work, plays a key role in the individual decision to volunteer. This evidence reinforces the findings of Cappellari et al. (2007) and Bruno and Fiorillo (2009) for Italian volunteers. Monetary rewards, gauged by lump-sum reimbursements for volunteer labour, also play a key role in the real-life decision to volunteer. What is more important, monetary rewards do not crowd out intrinsic motivation since volunteers who are intrinsically motivated and who get monetary rewards supply more hours than those who are intrinsically motivated and are not monetarily rewarded.A possible explanation of the last result calls for the particular sample of regular volunteers used in this paper. Indeed, I am aware that the data set has some limitations. First, the data set observes only volunteers at one point in time.

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It is very possible that some unobserved characteristics of volunteers determine what type of voluntary job people accept. Second, the data set includes only volunteers, but does not look at non-volunteers. So, for example, if volunteers intrinsically motivated with direct reward were to get no monetary reward, they might stop volunteering and would be outside the data set. Obviously, these limits might give biased results. With data at hand I cannot exclude these issues. However, as the crowd-out function of monetary rewards has received little attention, the findings of this paper are a starting point for further research in which to also explore the matters mentioned above.Furthermore, the results of the present paper also open other questions for future research.As we saw in Section 3, Frey and Jegen (2001, 594595) emphasize the psychological conditions under which the crowding-out effect appears: i) monetary rewards crowd out intrinsic motivation if the individuals affected perceive them to be controlling. In this case, self-determination suffers and the individuals react by reducing their intrinsic motivation in the controlled activity; ii) monetary rewards crowd out intrinsic motivation if the individuals affected feel that their involvement and competence are not appreciated by the principal. In this case, self-esteem is weakened and individuals reduce their effort. Thus, when intrinsic motivation is taken as depending on the application of monetary rewards, an additional consid- eration becomes relevant: are self-determination and self-esteem important mediators between monetary rewards and intrinsic motivation?Additionally, in Italy, Law 64/2001 introduced the Civilian National Service, regulating part of the voluntary work supplied in the country and introducing monetary rewards for volunteering. The findings of this paper indicate that while volunteers who get monetary payments supply more unpaid work, intrinsically motivated volunteers who receive monetary rewards offer fewer hours of volunteering (interacted variable). Further research in this area is undoubtedly required.

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Les re compenses mone taires re duisent-elles la motivation intrinse` que des be ne voles? Quelques applications a` des cas de be ne volat en Italie

Larticle etudie les determinants du benevolat classique en se basant sur la litterature etudiant les motivations intrinse`ques et extrinse`ques. Sa principale contribution reside dans lanalyse du ro le des recompenses monetaires dans linfluence que celles-ci ont sur la motivation intrinse`que. Il utilise des mode`les permettant de tester des hypothe`ses empiriques sur les effets des recompenses monetaires, de la motivation intrinse`que et de leur combinaison sur loffre de travail benevole. A partir dune enquete menee en Italie, larticle indique, tout en contro lant des biais endoge`nes, que les paiements monetaires ainsi que la motivation intrinse`que jouent dans la vie reelle un ro le dans la decision doffrir du travail benevole mais que les recompenses monetaires ne reduisent pas la motivation intrinse`que.

Verdra ngen moneta re Belohnungen die intrinsische Motivation von ehrenamtlich Ta tigen? Einige empirische Befunde bei Ehrenamtlichen in Italien

164DAMIANO FIORILLOIn diesem Artikel werden die Determinanten regula rer ehrenamtlicher Ta tigkeituntersucht, ausgehend von der bisherigen Literatur

u ber extrinsische und


intrinsische Motivationen. Der Hauptbeitrag besteht in der Analyse der Rolle moneta rer Belohnungen bei der Beeinflussung intrinsischer Motivation. Angewendet werden Rahmenkonzepte, die es ermo glichen, empirische Hypothesen u ber die Wirkungen moneta rer Belohnungen, intrinsischer Motivation und der Kombination von beidem auf das ehrenamtliche Arbeitsangebot aufzustellen. Unter Beru cksichtigung endogener Verzerrung wird auf der Grundlage einer in Italien vorgenommenen Erhebung gezeigt, dass sowohl moneta re Zahlungen als auch intrinsische Motivation eine Rolle bei der tatsa chlichen Entscheidung spielen, ehrenamtliche Arbeit zu leisten, doch verdra ngen moneta re Belohnungen intrinsische Motivation nicht.

Las recompensas monetarias reducen la motivacio n intrnseca del voluntariado? Algunas aplicaciones al caso del voluntariado en Italia

El artculo estudia los determinantes del voluntariado cla sico y, basa ndose en la liter- atura, las motivaciones intrnsecas y extrnsecas del mismo. Su principal contribucio n reside en el ana lisis del papel de las recompensas monetarias en la influencia que las mismas tienen sobre la motivacio n intrnseca. Utiliza modelos que permiten verificar hipo tesis empricas sobre los efectos de las recompensas monetarias, de la motivacio n intrnseca y de su combinacio n sobre la oferta de trabajo benevolo. A partir de una encuesta llevada a cabo en Italia, el artculo pone de manifiesto, depurando los sesgos,

3 Volunt Fiorillo-2011-Annals of Public and Cooperative Economics

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