Thanks for nothing?: not-for-profits and motivated agents

Ghatak, Maitreesh ORCID: 0000-0002-0126-0897 and Mueller, Hannes (2011) Thanks for nothing?: not-for-profits and motivated agents. Journal of Public Economics, 95 (1-2). pp. 94-105. ISSN 0047-2727

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Abstract

We re-examine the labor donation theory of not-for-profits and show that these organizations may exist not necessarily because motivated workers prefer to work in them, or that they dominate for-profits in terms of welfare, but because the excess supply of motivated workers makes the non-profit form more attractive to managers. We show that if firms had to compete for motivated workers then not-for-profit firms would be competed out by for-profit firms. Therefore, in the choice between not-for-profit and for-profit provision, other than incentive problems, the distribution of rents between management and workers, and consequently, the relative scarcity of motivated workers may play an important role.

Item Type:	Article
Official URL:	http://www.elsevier.com/wps/find/journaldescriptio...
Additional Information:	© 2010 Elsevier B.V.
Divisions:	STICERD
Subjects:	H Social Sciences > HD Industries. Land use. Labor
Date Deposited:	22 Mar 2011 15:47
Last Modified:	11 Sep 2025 08:00
URI:	http://eprints.lse.ac.uk/id/eprint/33373

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