When and how does volunteering influence wages? – Evidence from panel data

Abstract

Volunteering is an activity in which individuals work for free to benefit others; however, research has also focused on the benefits volunteers themselves might experience. We add to the literature by focusing on how not only volunteering itself has an impact on wages but how the intensity, duration and timing of volunteering also have an effect on these. In addition, we distinguish between the effects on volunteers in the same job and when changing a job, and test the role of social capital. Using German data from the Socio-Economic Panel, we find that current volunteering has positive effects on wages in a fixed effects wage regression, especially if individuals volunteer with low to medium intensity. The duration of volunteering does not increase wages. However, based on the dummy impact function, we find that volunteering increases wages almost immediately and that this effect remains fairly constant over time. We find no indication that reverse causality drives this effect. Furthermore, we show that the wage benefits of volunteering are realized only through job changes, not on-the-job wage progression. With regard to job changers, we show that social capital accumulation through volunteering is one reason explaining the observed wage effects.

There’s More in the Data! Using Month-Specific Information to Estimate Changes Before and After Major Life Events

“…Recent studies have analyzed how diverse outcomes-such as life satisfaction, finances, attitudes, health, or housework sharing-change in response to various life events, such as divorce, having children, one's children moving out, taking care of a spouse, changing residences, volunteering, or entering the labor market (Eberl and Krug 2021;Erlinghagen et al 2021;Kratz 2021Kratz , 2021Mari and Cutuli 2021;Nylin et al 2021;Schulz and Raab 2022;Torche and Rauf 2021;Tosi and Goisis 2021;Van Winkle and Leopold 2021). In short, research on changes over the course of life events is thematically diverse and thriving.…”

“…Furthermore, many researchers interested in labor market transitions have used panel data to study-among other factors-job loss, entering self-employment, and retirement, and how these changes are associated with changes in life satisfaction, personality traits, or risk-taking (Anger, Camehl, and Peter 2017;Brüderl, Kratz, and Bauer 2019;Hahn et al 2015;Hanglberger and Merz 2015;Hetschko, Knabe, and Schöb 2019;Leopold et al 2017;Lucas et al 2004;Merz 2018;van der Zwan, Hessels, and Rietveld 2018). Other research has looked at how health, well-being, and wages change over the course of life events, such as migration or moving (Erlinghagen, Kern, and Stein 2021;Nowok, Findlay, and McCollum 2018;Wolbring 2017), the occurrence of disability (Oswald and Powdthavee 2008;Pagán-Rodríguez 2012;Powdthavee 2009), children's incarceration (Sirois 2020), and becoming a volunteer (Eberl and Krug 2021). This overview is by no means exhaustive, but it shows that analyzing panel data to examine outcomes before and after a life event is a thriving field of social science research.…”

“…In fact, the majority of studies analyze changes between yearly time points before and after the event-which is why we describe this as the current state-of-the-art and use it as a reference point for our analyses (Aassve et al 2021;Brüderl et al 2019;Erlinghagen et al 2021;Gardner and Oswald 2006;Georgellis et al 2012;Gerlich and Wolbring 2021;Goisis et al 2019;Hanglberger and Merz 2015;Hetschko et al 2019;Kratz 2021;Leopold et al 2017;Mari and Cutuli 2021;Merz 2018;Musick et al 2020;Nowok et al 2018;Nylin et al 2021;Pagán-Rodríguez 2012;Powdthavee 2009;Preetz 2022;Schulz and Raab 2022;Tosi and van den Broek 2020;Tosi and Goisis 2021;Van Winkle and Leopold 2021;West et al 2019;Wolbring 2017;van der Zwan et al 2018). Some studies use intervals that are even broader than yearly intervals or distinguish between time intervals of varying sizes (e.g., Eberl and Krug 2021). They typically use oneyear categories close to the event and intervals of two years or longer for periods further away from the event (Leopold 2018;Myrskylä and Margolis 2014;Pollmann-Schult 2014;Torche and Rauf 2021).…”

Social capital as a partial explanation for gender wage gaps

“…Respondents are asked for the number of organizations, in terms of sports clubs or voluntary organizations, in which they participate. Volunteering is often used as a measure for social capital in the literature (e.g., Eberl & Krug, 2020; Ruiter & De Graaf, 2008) and is the only measure that does not focus on friends in our analysis. The UKHLS further contains an item battery that serves as a resource generator.…”