What Determines the (Internal) Wage Distribution in Non-Profit Organizations?

The aim of this paper is to analyze wage dispersion within non-profit organizations (NPOs). In our analysis, we address the question if volunteer workers, donations and public subsidies influence the within-firm wage dispersion in NPOs. In order to answer the research question we use Austrian matched employer-employee data collected in 2006. We estimate an instrument variable regression and find that NPOs that employ volunteer workers and NPOs with a more even mix between paid and unpaid staff display smaller wage dispersion. Donations and public subsidies augment the wage dispersion.