Annals of Public and Cooperative Economics 82:2 2011

pp. 139165

DO MONETARY REWARDS CROWD OUT THE INTRINSIC

MOTIVATION OF VOLUNTEERS?
SOME EMPIRICAL EVIDENCE FOR ITALIAN
VOLUNTEERS
Damiano FIORILLO
University 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.

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 undoubtedly
improved 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 Turati 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:
damiano.fiorillo@uniparthenope.it

Resume en fin darticle; Zusammenfassung am Ende des Artikels; resumen al final

del
artculo.
1
Titmuss (1970), Upton (1973).
2
For a survey see Pittman and Heller (1987) and Lane (1991).
C 2011 The Author
Annals 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

140

DAMIANO FIORILLO

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 late
1990s 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 Myers
2007, 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).

C 2011 The Author
Annals of Public and Cooperative Economics C 2011 CIRIEC

MONETARY REWARDS AND THE MOTIVITATION OF VOLUNTEERS

141

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.

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).
C 2011 The Author
Annals of Public and Cooperative Economics

2011 CIRIEC

142

DAMIANO FIORILLO

(2) People can volunteer in order to invest in social networking. Through engagement 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 individuals
are 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.
C 2011 The Author
Annals of Public and Cooperative Economics C 2011 CIRIEC

MONETARY REWARDS AND THE MOTIVITATION OF VOLUNTEERS

143

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

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 (U V > 0, U VV < 0), whereas
marginal cost is increasing (C V > 0, C VV > 0)8 . Of course, a rational individual
chooses the amount of volunteering V that maximizes his/her net benefit, by equating
marginal utility with marginal disutility of unpaid work: U V C V = 0.
I study how changes in M and R affect optimal choice V . To begin with, I
consider
intrinsically
motivated
agents
who receive
no monetary
rewardsin(Mhis/her
> 0,
R
= 0), and
examine
the
behavioural
response
of the
to an
increase
motivation.
The
optimal
supply of volunteering
V agent
changes
according
to (by the
envelope theorem):
UVV

dV
+ UV M = 0
dM

(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 U i to denote partial derivatives with respect to the ith
variable U/ i. I further assume that U M > 0 and C R <
0.
C 2011 The Author
Annals of Public and Cooperative Economics

2011 CIRIEC

144

which may be rearranged into

DAMIANO FIORILLO

dV

dM

UV M
=

(2)

UVV

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

> 0. This is the

volunteering. If U VM > 0, volunteer labour supply increases, dV
dM
intrinsic 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
get monetary
incentives
but organization
who are not
intrinsically
motivated
(M = agents
0, R > who
0). Assume
that the
non-profit
increases R. Changes in monetary rewards have the following impact on voluntary
labour:
dV
0 = CVV
(3)
+ CV R
dR
and rearranging
(4)
dV
CV R
dR

CVV

Since the denominator is positive (C VV > 0), the sign of dV /.dR depends on
the sign of C VM , or on the effect of the monetary incentives on the opportunity cost
dV
> 0. This is the
of volunteering. If C VR < 0, volunteer labour supply increases, dR
relative 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 (C VR < 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
dV
UV R + UV M
(5)
+ UVV
= CV R + CVV
dR
dR
dR
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.
C 2011 The Author
Annals of Public and Cooperative Economics C 2011 CIRIEC

MONETARY REWARDS AND THE MOTIVITATION OF VOLUNTEERS

which may be rearranged into

U V R CV R
dV
dR

CVV UVV

UV M
+

CVV UVV

145

dM

(6)

dR

The second
term of
(6)0 shows
the effect
monetary
on intrinsic
motivation,
with dM/.dR
or dM/.dR
0. ofGiven
that rewards
the denominator
is
positive,
the sign of expression (6) rests on U VR , C VR 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 emphasized 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 (C VR < 0) and the marginal utility of volunteering (U VR < 0) with U VR
dominating C VR . 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
= (<0) + (>0)(<0) = (<0).
dR
The second case is the crowding-in effect highlighted by Frey and Jegen (2001).
It occurs when an increase in monetary rewards reduces the opportunity cost of
volunteering (C VR < 0) but raises the marginal utility of volunteering (U VR > 0).
Moreover, the effect of monetary rewards on intrinsic motivation is positive, i.e.
dM/.dR > 0. As a result, an increase in monetary rewards raises voluntary labour
dV
supply: dR
= (>0) + (>0)(>0) =

(>0).
In the crowding-out effect, a feasible interpretation of U VR < 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
is
provided and R = 0 individuals recognize a nonmarket transfer; as soon as R becomes
positive, 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 C VR dominates U VR . 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
U VR dominates C VR .
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

MONETARY REWARDS AND THE MOTIVITATION OF VOLUNTEERS

two psychological conditions under which

Impaired
C 2011 The Author
Annals of Public and Cooperative Economics

2011 CIRIEC

145

the crowd-out effect appear, namely: 1)

146

DAMIANO FIORILLO

Table 1 Empirical hypotheses to be tested

Effect

Proxy

Relative price
Intrinsic motivation
Crowding-out

Monetary rewards
Intrinsic motivation
Monetary rewards intrinsic motivation
Monetary rewards plus Monetary rewards intrinsic motivation

Expected sign
+
+

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
statistics

Data set and descriptive

The empirical analysis is based on the Survey on Employment in the Social

Care 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).
C 2011 The Author
Annals of Public and Cooperative Economics C 2011 CIRIEC

MONETARY REWARDS AND THE MOTIVITATION OF VOLUNTEERS

147

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 15
Italian 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 was
counted, 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, and
in the presence of a trained interviewer.
14
While Frey and Go tte (1999) used the question: Did you receive financial
compensations
for 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 this
issue.
C 2011 The Author
Annals of Public and Cooperative Economics

2011 CIRIEC

148

DAMIANO FIORILLO

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 only
20 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 term
Re gulation Introjecte e Altruiste for the intrinsic motivation by which le be ne vole se
conforme
a` 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 data
summary 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.
C

2011 The Author

148

DAMIANO FIORILLO
Annals of Public and Cooperative Economics C 2011 CIRIEC

MONETARY REWARDS AND THE MOTIVITATION OF VOLUNTEERS

149

Table 2 Variable definitions

Variable
Dependent variables
Hours per week
Independent variables
Key variables
Monetary rewards
Intrinsic motivation
Individual characteristics
Female
otherwise
Married
group
Single
Divorced/widowed
Age 1620
group
Age 2130
Age 3140
Age 4150
Age 5160
Age 61+
Educational level
Elementary school
otherwise
Junior High school
High school
University
Vocational qualification
Occupational status
Employed
Unemployed
Student
Housewife
Retired
Military/Objector
Other professional condition
Volunteer activities
Coordination
Management
Service supply
Support
otherwise Other activities
otherwise.

Definitions
Number of hours of volunteer labour per week

Dummy, 1 if volunteer receives lump-sum reimbursements for voluntary

labour; 0 otherwise
Dummy, 1 if volunteer agrees that voluntary work is a moral duty;
0 otherwise
Dummy, 1 if female; 0
Dummy, 1 if married; 0 otherwise. Reference
Dummy, 1 if single; 0 otherwise
Dummy, 1 if divorced and/or widowed : 0 otherwise
Dummy, 1 if age is between 16 and 20; 0 otherwise. Reference
Dummy, 1 if age is between 21 and 30; 0 otherwise
Dummy, 1 if age is between 31 and 40; 0 otherwise.
Dummy, 1 if age is between 41 and 50; 0 otherwise
Dummy, 1 if age is between 51 and 60; 0 otherwise
Dummy, 1 if age is equal to 61 and above; 0 otherwise
Dummy, 1 if elementary school or no education; 0
Dummy, 1 if compulsory education; 0 otherwise
Dummy, 1 if high school graduates; 0 otherwise. Reference group
Dummy, 1 if university degree and doctorate; 0 otherwise
Dummy, 1 if specific qualification to perform welfare and educational
services
Dummy, 1 if volunteer is employed; 0 otherwise. Reference group
Dummy, 1 if volunteer is unemployed; 0 otherwise
Dummy, 1 if volunteer is a student; 0 otherwise
Dummy, 1 if volunteer is a housewife; 0 otherwise
Dummy, 1 if volunteer is retired; 0 otherwise
Dummy, 1 if volunteer is in military service and/or a conscientious
objector; 0 otherwise
Dummy, 1 if volunteer is in another professional condition; 0 otherwise
Dummy, 1 if volunteer is involved in coordination/responsibility;
0 otherwise
Dummy, 1 if volunteer is involved in management; 0 otherwise
Dummy, 1 if volunteer is involved in service supply; 0 otherwise
Dummy, 1 if volunteer is involved in support activity; 0
Dummy, 1 if volunteer is involved in other activities; 0
Reference group

Types of organization
Public
For-profit
Lay non-profit
Religious non-profit
Public/Private

Dummy, 1 if the type of organization is public; 0 otherwise

Dummy, 1 if the type of organization is private for-profit; 0 otherwise
Dummy, 1 if the type of organization is non-religious private non-profit;
0 otherwise
Dummy, 1 if the type of organization is religious private non-profit;
0 otherwise. Reference group
Dummy, 1 if the type of organization is mixed (public/private); 0 otherwise
Continued

MONETARY REWARDS AND THE MOTIVITATION OF VOLUNTEERS

C 2011 The Author
Annals of Public and Cooperative Economics

2011 CIRIEC

149

150

DAMIANO FIORILLO

Table 2 Continued
Variable
Other independent variables
Employed in social services
Volunteer experience
Training
Volunteering of father/mother
Continue volunteering
Macro-regions
North-West
North-East
Centre
South

Definitions
Dummy, 1 if volunteer is employed in welfare and educational services;
0 otherwise
Number of years of volunteering experience
Dummy, 1 if volunteer participated in educational experiences supported
by the organization
Dummy, 1 if parents are volunteers; 0 otherwise
Dummy, 1 if volunteer could keep on voluntary work in future; 0 otherwise
Dummy, 1 if volunteer resides in North-West; 0 otherwise.
Reference group
Dummy, 1 if volunteer resides in North-East; 0 otherwise
Dummy, 1 if volunteer resides in Centre; 0 otherwise
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).

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 variable
Vi = X i + Ri + Ii + Ri Ii + i
(7)
where V i are hours of volunteer labour, X i is the matrix of explanatory variables, R i
is the vector of the monetary payments, I i is the vector of the intrinsic motivation,
C 2011 The Author
Annals of Public and Cooperative Economics C 2011 CIRIEC

MONETARY REWARDS AND THE MOTIVITATION OF VOLUNTEERS

151

Table 3 Data summary

Regular volunteer work
Variable

Obs.

Mean

SD

Hours per week

Monetary rewards
Intrinsic motivation
Monetary rewards intrinsic motivation
Female
Single
Divorced/widowed
Age 2130
Age 3140
Age 4150
Age 5160
Age 61+
Elementary school
Junior High school
University
Vocational qualification
Unemployed
Student
Housewife
Retired
Military/Objector
Other professional condition
Employed in social services
Volunteer experience
Coordinationa
Managementa
Service supplya
Supporta
Training
Public
For-profit
Lay non-profit
Public/Private
Volunteering father/mother
Continue volunteering
North-East
Centre
South

506
518
507
495
531
531
531
534
534
534
534
534
531
531
531
520
523
523
523
523
523
523
525
534
529
529
529
529
514
534
534
534
534
528
530
534
534
534

9.39
0.09
0.57
0.05
0.63
0.53
0.07
0.34
0.16
0.13
0.15
0.16
0.05
0.18
0.20
0.14
0.12
0.18
0.15
0.21
0.03
0.04
0.07
4.85
0,11
0.03
0.65
0.24
0.34
0.24
0.01
0.24
0.18
0.09
0.96
0.31
0.14
0.28

9.98
0.29
0.49
0.22
0.48
0.49
0.25
0.47
0.37
0.34
0.36
0.37
0.23
0.39
0.40
0.34
0.32
0.39
0.35
0.40
0.16
0.19
0.25
4.43
0.32
0.17
0.48
0.43
0.47
0.43
0.06
0.43
0.38
0.29
0.19
0.46
0.35
0.45

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 week

Monetary rewards
Intrinsic motivation

Hours per week

Monetary rewards

Intrinsic motivation

1.00
0.25
0.01

1.00
0.02

1.00

C 2011 The Author

Annals of Public and Cooperative Economics

2011 CIRIEC

152

DAMIANO FIORILLO

Table 5 OLS estimates for regular volunteer work

Hours per week
Variable
Monetary rewards
Intrinsic motivation
Monetary rewards
Intrinsic motivation
Female
Single
Divorced/widowed
Age 2130
Age 3140
Age 4150
Age 5160
Age 61+
Elementary school
Junior High school
University
Vocational qualification
Unemployed
Housewife
Student
Retired
Military/Objector
Other professional
condition
Employed in social
services
Volunteer experience
Coordination
Management
Service supply
Support
Training
Public
For-profit
Lay non-profit
Public/Private
Volunteering of
father/mother
Continue volunteering
North-East
Centre
South
No. obs.

I
0.535

II

0.167

(0.287)
(0.065)

0.075
0.192
0.293
0.092
0.100
0.334
0.284
0.181
0.124
0.218
0.351
0.148
0.285
0.135
0.223
0.343
1.726
0.845
0.188

III

0.760

0.753

0.313
0.397

(0.280)
(0.070)
(0.276)

0.210

0.372

(0.265)
(0.055)
(0.252)

(0.058)
(0.132)
(0.071)
(0.136)
(0.118)
(0.132)
(0.165)
(0.194)
(0.129)
(0.102)
(0.102)
(0.120)
(0.107)
(0.108)
(0.165)
(0.131)
(0.229)
(0.326)
(0.113)

0.070
0.195
0.285
0.087
0.087
0.317
0.259
0.153
0.116
0.236
0.362
0.139
0.282
0.148
0.217
0.361
1.718
0.879
0.213

(0.058)
(0.134)
(0.070)
(0.120)
(0.120)
(0.130)
(0.157)
(0.191)
(0.127)
(0.103)
(0.101)
(0.120)
(0.108)
(0.107)
(0.165)
(0.132)
(0.230)
(0.330)
(0.117)

0.054
0.244
0.210

0.092
0.045
0.360

0.251
0.133
0.048
0.267
0.386
0.103
0.299
0.237
0.246
0.442

1.735

0.906
0.188

(0.060)
(0.142)
(0.060)
(0.114)
(0.130)
(0.144)
(0.152)
(0.183)
(0.126)
(0.100)
(0.097)
(0.111)
(0.102)
(0.112)
(0.153)
(0.121)
(0.194)
(0.327)
(0.134)

0.029

(0.007)

0.028

(0.008)

0.139

(0.100)

0.132

(0.099)

0.020
0.385
0.239
0.263
0.060
0.128

(0.007)
(0.112)
(0.230)
(0.101)
(0.093)
(0.094)

0.103
0.480
0.089
0.012
0.349

(0.131)
(0.332)
(0.128)
(0.160)
(0.127)

0.089
0.483
0.086
0.016
0.353

(0.141)
(0.336)
(0.131)
(0.156)
(0.128)

0.060
0.764
0.038
0.010
0.327

0.564

(0.216)

0.388
0.237
0.773
436

(0.174)
(0.145)
(0.197)

0.582

(0.220)

0.393
0.254
0.760

(0.177)
(0.148)
(0.185)
436

(0.112)
(0.369)
(0.119)
(0.146)
(0.128)

0.587

(0.193)

0.458

0.339
0.799

(0.142)
(0.133)
(0.166)
434

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 provincial
level. The symbols , , denote significance at the 1, 5 and 10 percent levels respectively.

R i I i is the combined term and i captures the unobservables. The set of

controls included in X i 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)
C 2011 The Author
Annals of Public and Cooperative Economics C 2011 CIRIEC

MONETARY REWARDS AND THE MOTIVITATION OF VOLUNTEERS

153

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 monetary
rewardsintrinsic motivation variable is not significant. The null hypothesis that the
intrinsic 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).19
Through 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).
C 2011 The Author
Annals of Public and Cooperative Economics

2011 CIRIEC

154

DAMIANO FIORILLO

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).20
Unemployed 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.
C 2011 The Author
Annals of Public and Cooperative Economics C 2011 CIRIEC

MONETARY REWARDS AND THE MOTIVITATION OF VOLUNTEERS

155

(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 macroregional 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

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 Devlin
2008). 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 close
friends, 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 that
volunteering is an opportunity to have new interpersonal relationships.
25
The idea is that in doing unpaid work volunteers enjoy interpersonal interactions per se
without any expectation of an extrinsic reward.
C 2011 The Author
Annals of Public and Cooperative Economics

2011 CIRIEC

15
6

Table 6 OLS estimates for regular volunteer work: robustness analysis with additional variables
Variable
Monetary rewards
Intrinsic motivation
Monetary rewards Intrinsic motivation

2011
The
Auth
or
Ann
als of
Publi
c
and
Coop
erati
ve
Econ
omic
s C
2011
CIRI
EC

Asked
Relational motivation
Professional experience
Recruitment
Individual controls
Macro-regional dummies
No. obs.
R2

I
0.735

II

0.204

0.357

(0.288)
(0.059)
(0.257)

0.063

(0.132)

0.735

III

0.179

0.349

(0.259)
(0.057)
(0.254)

0.101

(0.099)

0.711

IV
(0.220)
(0.056)
(0.241)

0.156
0.333

0.225

0.751

(0.269)
(0.063)
(0.285)

0.215

0.370

(0.088)
0.178

(0.156)

Yes
Yes

Yes
Yes

Yes
Yes

Yes
Yes

434
0.42

430
0.43

426
0.44

430
0.43

Notes:
Dependent
natural
logarithms
of hours per week.
The
individualofcontrols
asatwell
as macro-regional
dummies
are,
described
in table
2.
Standard
errors (invariables
brackets)inare
corrected
for heteroskedasticity
and
clustering
residuals
provincial
level. The symbols
, denote
significance
at
the 1, 5 and
10 percent levels respectively.

D
A
M
IA
N
O
FI
O
RI
L

MONETARY REWARDS AND THE MOTIVITATION OF VOLUNTEERS

157

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 signif- icant 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 monetary
rewardsintrinsic motivation is statistically insignificant in Table 5.

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
voluntary
work 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.
C 2011 The Author
Annals of Public and Cooperative Economics

2011 CIRIEC

15
8

Table 7 OLS estimates for regular volunteer work: robustness analysis with low and high intrinsic motivation
Variable
Monetary
rewards
Low intrinsic
motivation
High intrinsic motivation
Monetary rewards low motivation
Monetary rewards high motivation

2011
The
Auth
or
Ann
als of
Publi
c
and
Coop
erati
ve
Econ
omic
s C
2011
CIRI
EC

I
0.226

II
(0.079)

0.017

III

(0.065)

IV

0.441

0.243

(0.243)
(0.086)

0.384

(0.205)

Individual controls
Macro-regional dummies

Yes
Yes

Yes
Yes

Yes
Yes

No. obs.
R2

441
0.39

441
0.38

434
0.42

0.603
0.065

(0.248)
(0.076)

0.257

(0.127)
Yes
Yes
434
0.41

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

D
A
M
IA
N
O
FI
O
RI
L

MONETARY REWARDS AND THE MOTIVITATION OF VOLUNTEERS

159

Table 8 2SLS estimates for regular volunteer work

Variable
Monetary rewards
Intrinsic motivation
Monetary rewards Intrinsic motivation

2SLS
1.183

(0.204)
(0.376)
(0.437)

0.879
1.080

Individual controls
Macro-regional dummies

Yes
Yes

No. obs.
R2
Sargan (p-value)
Wu-Hausman (p-value)

415
0.32
0.73
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
and
clustering of residuals at provincial level. The symbols , and denote significance at the 1, 5 and 10
percent
levels, 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.
C

2011 The Author

MONETARY REWARDS AND THE MOTIVITATION

OF VOLUNTEERS
Annals of Public and Cooperative Economics C 2011 CIRIEC

159

160

DAMIANO FIORILLO

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 of
the intrinsically motivated individuals is (1.1831.080 = 0.103) positive (though not
statistically significant). Thus, it seems correct to conclude that a crowding-out effect
does not emerge: all the estimations (Ordinary Least Squares and Instrumental
Variables) show a positive effect of monetary rewards on hours volunteered.

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.
C 2011 The Author
Annals of Public and Cooperative Economics C 2011 CIRIEC

MONETARY REWARDS AND THE MOTIVITATION OF VOLUNTEERS

161

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.

REFERENCES

ANDREONI J., 1990, Impure altruism and donations to public goods: a theory of
warm-glow giving, Economic Journal, 100, 464467.
APINUNMAHAKUL A. and DEVLIN R. A., 2008, Social networks and private
philanthropy, Journal of Public Economics, 92, 309328.
BE NABOU R. and TIROLE J., 2006, Incentives and prosocial behaviour,
American
Economic Review, 96, 16521878.
BE NABOU R. and TIROLE J., 2003, Intrinsic and extrinsic motivation, Review
of
Economic Studies, 70, 489520.
BEUGELSDIJK S. and VAN SCHAIK T., 2005, Social capital and growth in European
regions: an empirical test, European Journal of Political Economy, 21, 301324.
BORZAGA C., 2000, ed., Capitale umano e qualita` del lavoro nei servizi sociali,
Roma, FIVOL.
C 2011 The Author
Annals of Public and Cooperative Economics

2011 CIRIEC

162

BORZAGA C. and MUSELLA M., 2004, ed.,

Produttivita`
zazioni nonprofit, Trento, Edizioni 31.

DAMIANO FIORILLO

ed efficienza nelle organiz-

BROWN E. and LANKFORD H., 1992, Gifts of money and gifts of time: estimating
the effects of tax prices and available time, Journal of Public Economics, 47, 321
341.
BRUNO B. and FIORILLO D., 2009, Why without pay? The intrinsic motivation
between investment and consumption in unpaid labour supply, CELPE Discussion
Paper, 111, University of Salerno.
CAPPELLARI L., GHINETTI P. and TURATI G., 2007, On time and money donations, DISCE Working Paper, 47, Universita` Cattolica del Sacro Cuore.
CAPPELLARI L. and TURATI G., 2004, Volunteer labour supply: the role of workers
motivations, Annals of Public and Cooperative Economics, 74, 619643.
CARPENTER J. and MEYERS C. K., 2007, Why volunteer? Evidence on the role of
altruism, reputation, and incentives, IZA Discussion Paper, 3021.
CHANTAL Y. and VALLERAND R. J., 2000, Construction et validation de le
chelle de motivation envers laction be ne vole (E MAB), Loisir et Societe, 23,
477508.
DAY K. M. and DEVLIN R. A., 1998, The payoff to work without pay: volunteer work
as an investment in human capital, Canadian Journal of Economics, 31, 1179
1191.
DAY K. M. and DEVLIN R. A., 1996, Volunteerism and crowding out: Canadian
econometrics evidence, Canadian Journal of Economics, 29, 3753.
DECI E. L., 1975, ed., Intrinsic Motivation, New York, Plenum Press.
DECI E. L., 1971, Effects on externally mediated rewards on intrinsic motivation,
Journal of Personality and Social Psychology, 18, 105115.
DECI E. L. and RYAN R. M., 2000c, Intrinsic and extrinsic motivations: classic
definitions and new directions, Contemporary Educational Psychology, 25, 5467.
DECI E. L. and RYAN R. M., 2000b, Self-determination theory and the facilitation
of intrinsic motivation, social development, and well-being, American Psychologist,
55, 6878.
DECI E. L. and RYAN R. M., 2000a, The what and why of goal pursuits: human
needs and self-determination of behavior, Psychological Inquiry, 11, 227268.
DECI E. L. and RYAN R. M., 1985, ed., Intrinsic Motivation and Self-determination
in Human Behavior, New York, Putnam.
DECI E. L., CONNELL J. P. and RYAN R. M., 1989, Self-determination in a work
organization, Journal of Applied Psychology, 74, 580590.
FIORILLO D., 2009b, Offerta di
gratuita in Italia: unanalisi microattivita`
econometrica, Rivista Internazionale di Scienze Sociali, 1, 2359.
FIORILLO D., 2009a, Volunteer Labour Supply: Micro-econometric evidence from
Italy, in DESTEFANIS S. and MUSELLA M., ed., Paid and Unpaid Labour in
Social Utility Services, Heidelberg: Physica, Verlag, 165181.
FIORILLO D., 2008, Le determinanti del capitale sociale in Italia, Rivista Italiana
degli Economisti, 13, 81135.
C 2011 The Author
Annals of Public and Cooperative Economics C 2011 CIRIEC

MONETARY REWARDS AND THE MOTIVITATION OF VOLUNTEERS

163

FREEMAN R. B., 1997, Working for nothing: the supply of volunteer labour,
Journal of Labor Economics, 15, S140S166.
FREY B. S., 1997, Not Just for the Money. An Economic Theory of Personal Motivation,
Cheltenham, UK, and Brookfield, USA, Edward Elgar.
FREY B. S., 1994, How intrinsic motivation is crowded out and in, Rationality and
Society, 6, 334352.
FREY B. S., 1992, Tertium datur: pricing, regulating and intrinsic motivation,
Kyklos, 45, 161184.
FREY B. S. and JEGEN R., 2001, Motivation crowding theory, Journal of Economic
Surveys, 15, 589611.
FREY B. S. and GO TTE L., 1999, Does pay motive volunteers?, Institute
for
Empirical Research in Economics, Working Paper Series, 7, University of Zurich.
FREY B. S. and OBERHOLZER-GEE F., 1997, The cost of price incentives: an
empirical analysis of motivation crowding-out, American Economic Review, 87,
746755.
GLEASER E. L., LAIBSON D. and SACERDOTE B., 2002, An economic approach to
social capital, Economic Journal, 112, F437F458.
GREPPERUD, S. and PEDERSEN P., 2006, Crowding-effects and work ethics.
Labour, 20, 125138.
HACKL F., HALLA M. and PRUCKNER G. J., 2007, Volunteering and income the
fallacy of good Samaritan?, Kyklos, 60, 77104.
ISTITUTO NAZIONALE DI STATISTICA (ISTAT), 2003, Le organizzazioni di volontariato in Italia, Roma.
ISTITUTO NAZIONALE DI STATISTICA (ISTAT), 1997, Indagine Multiscopo sulle
Famiglie, Aspetti della vita Quotidiana, Roma.
IYER S., KITSON M. and TOH B., 2005, Social capital, economic growth and regional
development, Regional Studies, 39, 10151040.
LANE R. E., 1991, ed., The Market Experience, Cambridge, Cambridge University
Press.
LEPPER M. R. and GREEN D., 1978, The Hidden Costs of Reward: New Perspectives
on the Psychology of Human Motivation, New York, Erlbaum.
MCGRAW K. O., 1978, The detrimental effects of reward on performance: a literature
review and a prediction model, in Lepper M. R. and Green D., 1978: 3360.
MEIER S., 2007, A survey on economic theories and field evidence on pro-social
behaviour, in Frey B. S. and Stutzer, ed., Economics and Psychology: a Promising
New Cross-disciplinary Field, Cambridge, MIT Press.
MEIER S. and STUTZER A., 2008, Is volunteering rewarding in itself?, Economica,
75, 3959.
MENCHIK P. L. and WEISBROD B. A., 1987, Volunteer labour supply, Journal of
Public Economics, 32, 159183.
MICHELUTTI M. and SCHENKEL M., 2009, Working for nothing and being happy.
The determinants of the satisfaction of volunteers and paid workers, in Destefanis
C 2011 The Author
Annals of Public and Cooperative Economics

2011 CIRIEC

164

DAMIANO FIORILLO

S., Musella M., ed., Paid and Unpaid Labour in Social Utility Services, Heidelberg:
Physica, Verlag, 8195.
MOSCA M., MUSELLA M. and PASTORE F., 2007, Relational goods, monitoring
and non-pecuniary compensations in the nonprofit sector: the case of Italian social
services, Annals of Public and Cooperative Economics, 78, 5786.
PITTMAN T. S. and HELLER J. F., 1987, Social motivation, Annual Review
of
Psychology, 38, 461489.
PROUTEAU L. and WOLFF F. C., 2008, On the relational motive for volunteer
work,
Journal of Economic Psychology, 28, 314335.
PROUTEAU L. and WOLFF F. C., 2006, Does volunteer work pay off in the labor
market?, Journal of Socio-Economics, 35, 9921013.
PROUTEAU L. and WOLFF F. C., 2004, Relational goods and associational participation, Annals of Public and Cooperative Economics, 75, 431463.
PUTNAM R., 1993, ed., Making democracy work, Princeton NJ, Princeton University
Press.
RANCI C., 2006, ed., Il volontariato, Bologna, Il Mulino
TITMUSS R. M., 1970,

The

Gift

Relationship, London, Allen

and

Unwin.

VAILLANCOURT F., 1994, To volunteer or not: Canada, 1987, Canadian Journal of

Economics, 27, 813826.
UPTON W. E., 1973, Altruism, attribution and intrinsic motivation in the recruitment
of blood donors, Doctoral Dissertation, Cornell University.
ZIEMEK S., 2006, Economic analysis of volunteers motivations a cross-country
study, Journal of Socio-Economics, 35, 532555.
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 litte

rature 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 mone
taires, de la motivation intrinse`que et de leur combinaison sur loffre de travail bene
vole. 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

In diesem Artikel
tigkeit

werden die

Determinanten

regula rer

ehrenamtlicher

Ta

164

untersucht,

ausgehend

von

der

bisherigen Literatur

u ber
und

DAMIANO FIORILLO

extrinsische

C 2011 The Author

Annals of Public and Cooperative Economics C 2011 CIRIEC

MONETARY REWARDS AND THE MOTIVITATION OF VOLUNTEERS

165

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, que los pagos monetarios, as como la
motivacio n intrnseca, juegan en la vida real un cierto papel en la decisio n de
prestar trabajo benevolo, pero que las recompensas monetarias no reducen la
motivacio n intrnseca.

C 2011 The Author

Annals of Public and Cooperative Economics

2011 CIRIEC