What determines volunteer work? On the effects of adverse selection and intrinsic motivation

•We consider the screening problem of a firm willing to hire job applicants.•Workers are intrinsically motivated and privately informed about their ability.•When intrinsic motivation is high, low-ability workers earn negative wages.•With limited liability, low-ability types are volunteers and provide equal effort.

We analyse the screening problem of a firm hiring workers without knowing their ability while observing their intrinsic motivation. We show that volunteerism is the contractual outcome when workers are low-skilled, have high motivation, and are protected by limited liability.