Paid and unpaid labor in non-profit organizations: Does the substitution effect exist?

In nonprofit organizations (NPOs) volunteers often work alongside paid workers. Such a coproduction setting can lead to tension between the two worker groups. This paper examines for the first time if and how volunteers influence the separation of paid employees, and thus it contributes to the debate over whether volunteers can substitute paid workers. Using Austrian data on an organizational level we find a significant impact of volunteers on the separations of paid workers in NPOs facing increased competition. These findings support the assumption that a partial substitution effect exists between paid workers and volunteers.

Bittschi, Benjamin, Astrid Pennerstorfer and Ulrike Schneider (2013), Paid and unpaid labor in non-profit organizations: Does the substitution effect exist?, WU Vienna University of Economics and Business, Institute for Social Policy, Working Papers, Wien