Three Essays on the Determinants of and Returns to Volunteering

Abstract

This thesis consists of three essays on the determinants of and returns to volunteering. The first essay, ‘volunteer opportunities and volunteering’ examines the relationship between physical access to charitable organizations and volunteering. Formal volunteer activities usually take place within a charitable or non-profit organization. While the physical presence of these organizations is required for citizens who want to contribute to their communities, the availability of charitable organizations (number and type) varies from neighbourhood to neighbourhood. Until now, no one has examined the role played by charity proximity on volunteer decisions. In this paper I use information on the location of registered charities in Canada (from the CRA T3010 registered charity returns) merged with survey information on volunteering (from General Social Surveys conducted by Statistics Canada) to examine how physical access affects volunteer behaviour. Careful attention is paid to the possibility that the measure of access might be endogenous: organizations and individuals may respond to the same unobservable factors when deciding where to locate. Various strategies including an instrumental variables procedure are undertaken to deal with this possibility. My results suggest that access does matter for the decision to volunteer as well as for the amount of time devoted to volunteering. My estimates imply that increasing the number of charitable organizations within a one-kilometre buffer around an individual’s place of residence by 6% (the growth rate of the number charities in Canada (between 2003 to 2009), increases the predicted probability of volunteering by 5%. The second essay, ‘the returns to working for free’ examines the relationship between volunteering and income. Previous studies have shown volunteering to be associated with an earnings premium, but many of these studies fail to take into account the possible endogeneity between volunteering and income. Using data from the General Social Surveys (2003, 2005, 2008, 2010 and 2013), I investigate the causal relationship between volunteering and income. I employ a novel instrument, a measure of access to charitable organizations around an individual’s place of residence, along with more conventional ones, like membership or participation in different groups or organizations, to examine this relationship and try to understand how volunteering might affect earned income. Identifying the effect of volunteering of the different subgroups affected by the different instruments provides a (surprisingly) large range of estimates. For example estimates in the upper range found in the literature (53%) are found for individuals who are induced to volunteer because of their membership or participation in sport or recreational organizations, no returns are found for those induced to volunteer because of their membership or participation in school or civic groups, negative returns (22%) are found for those induced to volunteer because of their membership or participation in religious affiliated groups and very large (47%), but imprecise estimates are found for those induced to volunteer because of proximity to charitable organizations.

The third essay, ‘doing good, feeling good: causal evidence from Canadian volunteers’ examines the relationships between volunteering and health, and volunteering and life satisfaction. A literature suggests that volunteers are healthier and happier than their non-volunteering counterparts. But this ‘observation’ is fraught with problems of endogeneity. Some papers have addressed the endogeneity problem with an instrumental variable technique; mostly relying on measures of ‘religiosity’ as instruments. However, no studies of such nature have been conducted in Canada. Using data from the General Social Surveys, I again employ the measure of physical access to charitable organizations within a three-kilometer radius of an individual’s place of residence as the main identifying instrument to examine the causal relationship between volunteering, health and life satisfaction for individuals aged 15 years old and over. Employing a conditional mixed process (CMP) to estimate the model, I conclude that volunteering is a significant predictor of health, and it has a statistically significant effect on life satisfaction for female and middle-aged individuals.