Why without pay? Intrinsic motivation in the unpaid labour supply

Economic theory explains the supply of volunteering alternatively as an ordinary consumer good or an investment good. This paper provides a simultaneous approach, considering both objectives, by using the psychological distinction between intrinsic and extrinsic motivations, in order to reconcile conflicting results reported in the literature. Following the simultaneity approach, the paper develops a theoretical model of unpaid labour supply within an agent's two-period utility maximization problem, taking into account the role of psychological motivation. The theoretical hypotheses are tested with a sample selection model for Italy, by using the 1997 Multipurpose Households Survey on everyday life issues carried out by the Italian National Statistical Office. A robustness analysis and endogeneity test for intrinsic motivation are also performed. Empirical analysis rejects the hypothesis that only a consumption or investment motive can explain Italian volunteers’ behaviour, supporting the hypothesis that both motives interact in shaping regular unpaid labour supply, with a stronger impact of consumption motives. The relevant variables for frequently supplied unpaid labour are intrinsic motivation, age, household income, family responsibilities and activity sector.

► Simultaneous investment and consumption approach to volunteering.
► Theoretical model of unpaid labour supply and psychological motivation.
► Empirical analysis for Italy with robustness analysis and an endogeneity test.
► Both consumption and investment motives shape the regular unpaid labour supply.
► Intrinsic motivation, age and activity sector are relevant for volunteering.