Author ORCID Identifier

Date of Award

Fall 12-1-2019

Degree Type


Degree Name

Doctor of Philosophy (PhD)


Public Management and Policy

First Advisor

Greg Lewis

Second Advisor

Barry Hirsch

Third Advisor

Janelle Kerlin

Fourth Advisor

Mirae Kim

Fifth Advisor

Audrey Leroux


Studies on the nonprofit pay differential find that nonprofit workers in the child daycare industry earn more than comparable for-profit workers (Ben-Ner, Ren, & Paulson, 2011; Preston, 1988), whereas nonprofit lawyers earn less than lawyers in for-profit firms (Frank, 1996; Weisbrod, 1983). Are nonprofit daycare center workers less altruistic than for-profit daycare workers or nonprofit lawyers? What is the meaning of a positive or negative nonprofit pay differential from various studies? This dissertation reframes the sectoral pay differential question and examines whether there is a donative labor effect for nonprofit workers relative to the for-profit workers.

Current empirical studies examining one or several industries produce a range of conflicting results, which makes comparison impossible and becomes a barrier to understanding the nature and magnitude of the nonprofit wage differential. Is there a relationship between industries and the sectoral pay differential? I develop measures to explain the relationship between the industry and the variability of the cross-sectoral pay differential based on the literature of commercialism on the industry level.

Prevailing theories, including donative labor theory, attenuated property rights theory, compensating wage theory, and efficiency wage theory, predict different outcomes. It remains unanswered what is the relationship of these theories, and why the conflicting theories find support in various studies. I employ the multilevel modeling approach to integrate research questions on different levels in one model to examine hypotheses developed from theories on different levels.

In the dissertation, I use nationally representative datasets and apply multilevel random effects modeling to answer two important questions: (1) Do nonprofits pay differently? And (2) what is the effect of commercialism? My analysis finds support for seemingly contradictory theories. The dissertation establishes an exhaustive inventory of nonprofit pay differentials for industries and occupations. The findings leave food for thought. Altruism motivation leads to lower pay for nonprofit workers, but the industry and occupation effects mask this difference.


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