Empirical Analysis on Charitable Behavior of Agents in the Public Sector: Cross-country Analysis Using Microdata

Empirical Analysis on Charitable Behavior of Agents

in the Public Sector: Cross-country Analysis Using

Microdata

Leiden University

MSc Public Administration: Economics and Governance Track

Master’s Thesis

Name:

Kinuko Kate Nakazawa

Student ID: s2092212

Date:

06/11/2018

Supervisor: Dr. Max van Lent

2nd reader: Dr. Joris van der Voet

Foreword

The topic of this master’s thesis originally comes from my curiosity and passion for understanding how we can improve services and products that public services provide for betterment of the society. One of the main reasons I decided to pursue a master’s degree in public administration was to deepen my knowledge about the public sector and its contribution to society, the economy, and many of the pressing matters that globalization brings. Furthermore, as I identify myself as a person with high altruistic preference and desire to contribute to the betterment of our society, analyzing charitable behavior of workers through the lens of altruism and public service motivation is very close to my heart.

Completing this research was definitely a journey. Through conducting my own research from the collection of data, identifying the appropriate method and analysis of the results, I had certainly deepened my knowledge of behavioral aspects of economics and that people are truly a crucial asset to the government and organizations in public sector. This research also taught me the importance of having organized and properly archived data. Having handled microdata has cultivated in me a curiosity for data science and how we can utilize collected data in the development of public sector and the services it provides. These are important aspects that I wish to carry with me as I proceed to becoming a professional in the field of public policy after completing my master’s program at Leiden University.

I would like to express my sincere gratitude for my supervisor Dr. Max van Lent, as he has guided me throughout the entire journey, and as his work provided a strong foundation for my research. His supervision was invaluable and I look forward to seeing how this field of research evolves in the future.

ABSTRACT

This paper provides an in-depth theoretical analysis of altruism, public service motivation and mission alignment that are highly associated with public sector employees. The research presents a model with the following key assumptions. First, public sector employees are likely to possess higher altruistic preferences than workers in private sector do. Second, for all workers, altruistic preferences can be expressed by engaging in volunteering activities outside their work and by exerting effort on the job. Public sector jobs tend to be pro-social in nature, making it easier for employees to contribute to the well-being of the society. Therefore, by substitution argument, compared to workers in private sector, public sector workers are less likely to engage in charitable activities. In addition, and most importantly, when public sector workers and their organizations have higher mission alignment, they feel even less need to volunteer. These predictions are tested using rich and diverse set of microdata from World Values Survey Association. The results of the analysis are contrary to my main hypothesis, they suggest that the likelihood of volunteering increases for workers in public sector with higher mission alignment. I apply the regression analysis on full sample, and then to two subgroups, OECD countries and non-OECD countries. Some commonality and heterogeneity are observed.

T

C

CHAPTER 1: INTRODUCTION ... 5

CHAPTER 2: BACKGROUND ... 7

2.1 ECONOMICS AND HUMAN DEVELOPMENT ... 7

2.2 LIMITATIONS OF HOMO-ECONOMICUS ... 9

CHAPTER 3: LITERATURE REVIEW AND THEORETICAL FRAMEWORK ... 13

3.1 ECONOMICS AND ALTRUISM ... 13

3.2 PUBLIC SERVICE MOTIVATION ... 17

3.3 MISSION ALIGNMENT ... 20 CHAPTER 4: HYPOTHESIS ... 22 4.1 KEY ASSUMPTIONS ... 22 4.2 RELATED RESEARCH ... 23 CHAPTER 5: DATA AND VARIABLES ... 27 5.1 DATA ... 27 5.2 DEPENDENT VARIABLE ... 27 5.3 INDEPENDENT VARIABLES ... 28 CHAPTER 6: RESEARCH METHOD ... 37 CHAPTER 7: RESULTS ... 40

7.1 RESULTS OF MAIN OLS REGRESSION ANALYSIS FOR FULL SAMPLE ... 40

7.2 RESULTS OF OLS REGRESSION ANALYSIS FOR OECD AND NON-OECD SUBGROUPS ... 44

CHAPTER 8: ANALYSIS AND IMPLICATIONS ... 45 CHAPTER 9: LIMITATIONS OF THE RESEARCH ... 51 CHAPTER 10: CONCLUDING REMARKS... 52 REFERENCES... 54 APPENDIX A... 63 APPENDIX B ... 64 APPENDIX C ... 65 APPENDIX D ... 66

CHAPTER

1:

I

In classic theories of economics, humans are assumed to be rational and self-interested, and make their financial and social decisions solely based on how those decisions would consequently maximize their utility. The selfish nature of humans is a main underlying assumption of economic theories by David Ricardo, Adam Smith, and John Stuart Mill, and is proven to be a very useful model in studying human behavior in economics to this day (Kluver et al., 2014; Persky, 1995). In reality, we see that people are not as self-regarding as these theories suggest. Many people choose to make donations to charity or public good such as schools and public parks (Konow, 2010; Andreoni, 1998, 1990). People choose certain types of professions because of their high altruistic preferences (Francois, 2000, 2007; Besley and Ghatak, 2005; Delfgaauw and Dur, 2008, 2009; Buurman et al., 2012, Dur and Zoutenbier, 2014; Dur and van Lent, 2017; Brekke and Nyborg, 2011). People make other-regarding decisions and take actions out of fairness (Kahneman et al., 1986; List, 2007; Camerer, 2003; Forsythe et al., 1994). Studies show that typically more than half of the population in rich countries make donations to charity (List and Price, 2012). Many people in poor countries donate their time, or actively help strangers in need (List and Price, 2012; Serneels et al., 2007; Serra, Serneels, and Barr, 2011). There are many non-profit organizations with missions dedicated to improving the well-being of others, or to a greater public good (Rose-Ackerman, 1986; Weisbrod, 1974; Gassler, 1986; 1987; 1990; 1998) A study by Andreoni and Miller (2002) found that majority of people are willing to give some of their money to complete strangers in order to help them improve their well-being. Society today offers many avenues and opportunities for us to participate in causes that aim to help strangers through online fundraising platforms and increasing use of social media. At the practical level, people can choose to make donations or engage in volunteering activities, or they can choose to work in jobs that aim to help others or contribute to well-being of society (Dur and van Lent, 2017). Individuals can decide to engage in either one of them, or both, to express their altruistic preferences.

This paper builds on research done by Dur and Zoutenbier (2014) and Dur and van Lent (2017). It constructs a comprehensive groundwork to analyze the role of altruistic preferences of individuals in their job choice, their ethics and motivations while on the job and charitable activities they engage in outside their job. Based on the existing literature in the field, I develop a theoretical model and test the model using a rich set of microdata. This analysis assumes that peoples’ altruistic preferences can be expressed in two ways; by volunteering or engaging in charitable

activities and by choosing a job in public sector and exerting effort into the job. When choosing a job, people make decisions to either take a job in the public or private sector. While on the job, people decide how much effort they exert. Outside their job, people decide how many charitable activities they engage in. These assumptions are in line with the recent related research done by Dur and van Lent (2017). Upon completing in-depth review of related literature and theoretical foundations, I make the following predictions. First, as discussed in more details below, individuals who choose jobs in the public sector have higher altruistic preferences compared to individuals who choose jobs in the private sector. This is because public sector jobs tend to provide more opportunities than private sector jobs to be useful to society or contribute to the well-being of others. On the same note, public sector workers strongly value the charitable nature of their job, while private sectors don’t place much value on such ethic (Dur and van Lent, 2017). This was observed in the social survey data published by International Social Survey Programme in 2017, as presented in the research by Dur and van Lent (2017). Assuming that workers in the public sector express their altruistic preferences and achieve their mission of helping others through their job, if their personal mission and the employer’s mission are highly aligned, individuals are more likely to exert effort on the job, because it becomes personally meaningful for them to achieve the goals of the organization they work for. Thus, the higher the mission alignment is, the more altruistic satisfaction public sector workers receive through their job. And because we assume that individuals express their altruistic preferences both by engaging in charitable activities or exerting effort in jobs with philanthropic goals (such as public sector jobs), workers in the public sector would engage in charitable activities less than workers in the private sector. The intuition behind this is that because public sector workers feel that they already contribute to the well-being of others through their job, they feel less need to seek additional outlets by engaging in volunteering or charitable activities. The model assumes that this is even truer for public sector workers with higher persona-mission alignment. My research model uses linear probability model, in particular OLS regression analysis. The data is retrieved from the World Value Survey Association, from their Wave 5 dataset. This data is microdata that consists of answers to surveys conducted in over 50 countries around the world from 2005 to 2009. My regression analysis produced outcomes that are contrary to my prediction. Given the altruistic preference of public sector workers, public sector workers with higher mission alignment engage in volunteer activities even more than private sector workers do. In other words, the philanthropic nature of the public sector jobs and high mission

alignment together yield higher likelihood of those workers volunteering outside work. The survey data provided by World Values Survey is rich and diverse, allowing cross-national comparison. In addition to the analysis on general population, I run the same regression analysis on two sub samples, OECD countries and non-OECD countries to observe heterogeneity and commonality.

The main goal of research is to contribute to the body of knowledge about the motivations of employees in public sector, as many of the related research such as Dur and Zoutenbier (2014), Dur and van Lent (2017), Coeley and Smith (2014) do as well. Better understanding of motivations of public sector workers lead to better management of public sector employees and thus better management of public sector organizations. Providing public service is highly labor intensive (Dur and Zoutenbier, 2014). This means that public sector employees are important asset in effectively operating their businesses. As I demonstrate below, public sector employers may need to rely on the altruistic motivation of individuals to self-select into public sector jobs, and the output of these organizations are impacted by the level of public service ethics and altruistic mission. Consequently, this research serves as a gentle reminder to public sector employers to consider the underlying motivations of their employees in their performance incentive schemes in order to maximize the halo effect created by mission alignment.

CHAPTER

2:

B

2.1

E

In a 2005 study, Richard Horan and his colleagues advanced a theoretical framework linking human development to economic principles. Horan et al. (2005) center their research around Neanderthal (also known as Homo neanderthalensis) extinction and the survival of humans (also known as Homo sapiens). Homo neanderthalensis is believed to have existed prior to Homo

sapiens, and their relatively sudden departure as Homo sapiens rose to dominance has been a

subject of interest for many paleontologists and anthropologists (Horan et al., 2005). In their research, Horan and his colleagues (2005) provide an economic theory for the extinction of Homo

neanderthalensis, through the evaluation of two existing benchmark models; the biological model

and the behavioral model (Horan et al. 2005). The biological model indicates that humans were equipped with more sophisticated tools, placing them at an advantage in terms of hunting for their survival, thus giving them biological advantage (Horan et al. 2005). The behavioral model suggests

that the human capacity to think symbolically enabled the formation of more sophisticated language, enhancing communication and co-operation (Horan et al., 2005). These behaviors would pave the road for complex economic systems, trade, and labor specialization. According to Horan et al., (2005), it is these behavioral traits and not necessarily just biology that would ultimately allow Homo sapiens to avoid the same fate as Homo neanderthalensis. The paper ends with remarks that humans’ behavioral choice and ability to form economic institutions played an integral role in their rise to dominance over Homo neanderthalensis (Horan et al., 2005).

In modern history, humans’ behavioral choices in economics continue to be a central theme of economic and political theory, addressed in the works of celebrated philosophers such as John

Stuart Mill and Adam Smith. One of the key underlying assumptions that emerged in the 19th

century was the notion of Homo economicus, which is considered to have emerged in response to John Stuart Mill’s work (Persky, 1995). In his essay “On the Definition of Political Economy; and on the Method of Investigation Proper to It”, Mill illustrates a hypothetical man with rigid, incredibly self-centered motives, serving as a useful abstraction in his economic analysis (Persky, 1995). According to Mill, political economy;

“… does not treat of the whole of man’s nature as modified by the social state, nor of the whole conduct of man in society. It is concerned with him solely as a being who desires to possess wealth, and who is capable of judging the comparative efficacy of means for obtaining that end (Mill, 1836. As cited in Persky, 1995, pp.222-223).”

While Mill's work invited criticisms and hostility towards this one-dimensional depiction of humankind, several of the founding fathers of modern economics such as Adam Smith and David Ricardo are in line with Mill’s arguments and particularly with his theory of selfish human behavior in economics (Ruffin, 2002; Persky, 1995). This selfish, profit-maximizing archetype of human behavior is now known as “Economic Man”, or Homo economicus (Persky, 1995). Adam Smith famously states in his work “The Wealth of Nations”;

“It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages (Smith, 1937. As cited in Dore, 1983, p.459).”

Many economists throughout the 19th _{century build mathematical models on the notion of Homo}

economicus, and it became a dominant interest in the fields of behavioral economics and social

sciences by the 20th _{century. For example, rational choice theory sought to explain mechanisms of}

human decision-making where selfishness is the central mechanism. Advocates of rational choice theory claim that, in general, humans make decisions based on their desire to maximize their utility and satisfaction in view of their beliefs about what may or may not occur due to the decisions they make (Schulz, 2011). Homo economicus has been addressed extensively in analysis of neoliberalism, neoclassical economic theory and more broadly in the rise of capitalism — Michael Foucault, Gary Becker, Wendy Brown and David Harvey are a few notable scholars on the subject (Read, 2009). While there is no single definition for the term Homo economicus, the term signifies an underlying assumption that everything humans engage in—from marriage to crime to having a family—is the outcome of particular cost versus benefit calculation (Read, 2009). In more recent studies of human behavior in economics, Homo economicus has been prominently employed in analysis of sectorial divide in labor markets (such as public vs. private) and even more extensively addressed in analysis of workers’ motivation in public sector (see Francois, 2000; Glazer, 2004; Besley and Ghatak, 2005; Delfgaauw and Dur, 2005; Prendergast, 2007 for review)

2.2

L

H

-

While many studies and much empirical evidence has provided support for the Homo economicus framework, researchers and economists have contested the applicability of these assumptions to reality. Although Adam Smith observed the motivating force of human selfishness in his work, he also concedes there is more to economic theory than simply humankind’s self-centered decision making. Smith opens his book “The Theory of Moral Sentiments” by stating;

“How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it. Of this kind is pity or compassion, the emotion which we feel for the misery of others, when we either see it, or are made to conceive it in a very lively manner (Haakonssen, 2002, p.11).”

Smith provides an extensive examination of sympathy in this book, which has been interpreted as a form of altruism by some readers (Ashraf et al., 2005). In “The Theory of Moral Sentiments”, Smith clearly views sympathy as one of the more important passions in humans (Ashraf et al., 2005, p.134). Anthony Downs is another acclaimed scholar who introduced an alternative perspective to Homo economicus. In his work “The public interest: its meaning in a democracy” (1962), he acknowledges vague but mixed motivations in people and politicians, stating “people and politicians have visions of a good society (Orchard and Stretton, 1997).” Before moving on to the alternative view presented by Downs, I emphasize here that Downs’ earlier work in fact aligned with that of J.S. Mill and T.H. Green, which became known as “public choice theory” (Orchard and Sretton, 1997). Public choice theory centers around the notion of homo economicus – that political behavior is determined by citizens material self-interest and satisfaction alone (Orchard and Sretton, 1997). This discourse has been developed, modified, and applied by American scholars between 1949 and 1971 (Orchard and Sretton, 1997). The most cited definition of public choice theory, according to Orchard and Sretton (1997) is one by Dnnis Mueller (1989), which goes as follows;

“Public choice can be defined as the economic study of non-market decision-making, or simply the application of economics to political science. The subject matter of public choice is the same as that of political science: the theory of the state, voting rules, voter behavior, party politics, the bureaucracy and so on. The methodology of public choice is that of economics, however. The basic behavioral

postulate of public choice, as for economics, is that man is an egoistic, rational, utility maximizer (Mueller, 1989. as cited in Orchard and Sretton, 1997, p. 409)”

Downs would later recant these theories in “The public interest: its meaning in a democracy” (1962), stating how it is time for scholars in the field to recognize the non-selfish motives of humans, and start taking ideas of public interest and common good as a measurement in judging the quality of government (Gassler, 1998; Orchard and Stretton, 1997). In his words;

“…As social scientists we should analyze the world realistically so that, as

ethical men, we can design social mechanisms that utilize men’s actual motives to produce social contributions as close as possible to our ideal of “the good society”. Failure to be realistic about human nature would lead us to design social mechanisms that do not achieve their desired ends. Conversely, abandoning ideals lead to cynical nihilism. I hope my amended model will provide greater insights into how to go about making the real world more like the ideal one (Downs, 1962. cited in Orchard and Stretton, 1997, p.411)”

If our economy and society is driven by an individual’s selfish decisions, how does one interpret the existence of voluntary organizations and non-profit enterprises? Furthermore, how do we explain the motivations of those who work for such organizations? Burton Weisbrod (1975) provides a celebrated theoretical framework to explain the formation of non-profit and voluntary organizations (Gassler, 1990). Weisbrod (1975) argues that when the market fails to provide collective or public goods, it is likely that citizens get involved in deciding how much the government will provide. Individuals who think the government does not provide enough should form non-profit enterprises to provide the remaining public good (Weisbrod, 1974; Gassler, 1990). Susan Rose-Ackerman (1986), another celebrated researcher in the field presents three dimensions to understanding the existence of non-profit organizations;

“First, work on nonprofits is closely linked to the work of both the new institutional economists and those who study the relationship between the forms of public organizations and their behavior… Second, another line of research analyzes the selection mechanisms which sort people across institutions. Entrepreneurs who are especially interested in high level of personal income will gravitate to jobs in the for-profit sector, while ideologists and altruists will choose nonprofits. Third, the study of markets where nonprofit firms are active is analogous to analysis of monopolistically competitive market with imperfect information (Rose-Ackerman, 1986. cited in Gassler, 1990, p.140)”

Building on Weisbrod and Rose-Ackerman, Robert Scott Gassler (1986; 1987; 1990; 1998) claims that altruistic individuals who create private non-profit enterprises are focused on the outcome of their work without the requirement of addressing free-rider problems. If there were no free-rider problems, then the services provided by non-profit organizations could have been delivered by government. Gassler’s arguments boil down to a simple notion—some people simply just want to do good things (Gassler, 1998). Formation of non-profit organizations is a product of such altruistic motives and Kantian ethics in modern economy. Here, Kantian ethic is the principle that one should “so act that you could will the maxim of your action to be a universal law”, or more simply, “act like you think everyone should” (Gassler, 1998). Gassler provides evidence that altruistic motives of employees and Kantian ethics of the organizations explain the existence of non-profit organizations, and once we can recognize the existence of non-profit organizations he economic model of non-profit organizations becomes more realistic (Gassler, 1998).

Providing a practical example of this principle, researchers such as Brekke and Nyborg (2010) insist that the logic of Scandinavian welfare states appears to be contrary to the Homo economicus argument. For example, employees in Norway are entitled to claim sick leave with full wage compensation without having to file official physician’s note (Brekke and Nyborg, 2010). In practice however, only 10% of the total level permitted by the rules are self-declared paid sick leave, suggesting that Norwegians generally do not abuse their entitlement even when it is easy to act selfishly (Eielsen, 2008, as cited in Brekke and Nyborg, 2010). Furthermore, the Homo

loss of leisure time – meaning unemployment would increase one’s utility due to increase in leisure when income is fully compensated by insurance (Brekke & Nyborg, 2010). Nonetheless, empirical evidence show that while the relationship between happiness and income is relatively weak, unemployment is the core cause of reduced happiness and hinders life satisfaction (Brekke and Nyborg, 2010). This implies that income aside, working brings some intrinsic value to life (Brekke and Nyborg, 2010).

There have been many economists who argue that any act of kindness can ultimately be traced back to the individual’s desire for his or her own benefit and satisfaction (Gassler, 1998). Nevertheless, as I have presented in this section, there is a wealth of theory and empirical evidence that suggests people’s willingness and desire to do good for others plays an integral role in the economy. The next chapter presents a review of related literature, beginning with an elaboration of humans’ altruism in economics. As I demonstrate, there is rich supply of literature on altruism in economic institutions and our society. For instance, the study of altruism in behavioral economics offers some useful insight into understanding how we as humans make decisions in social contexts, choosing jobs, and making donations (e.g. Besley and Ghatal, 2005; Dur and Zoutenbier, 2014; Dur and van Lent, 2007). In addition, approaching altruism from different angles provides links between non-profit organizations and economics (e.g. Gassler, 1998; Rose-Ackerman, 1996). The literature review then moves onto introducing theories and empirical research on public service motivation and mission alignment. Providing a thorough overview of these elements are essential part of my research, as I draw my hypothesis from the rich set of existing literature on these values.

CHAPTER

3:

L

R

T

F

3.1

E

A

Altruism in economics has been analyzed by many notable scholars in the field, such as David Collard (1978), Susan Rose-Ackerman (1982), James Andreoni (1990). An iconic term coined by Collard was “non-selfish economics”, a school of thought in which he argues that selfishness is in fact only a special case of human behavior. Instead, he takes the influence of altruism as a serious force in economic theory, examining several dimensions of altruism in his research (Boulding, 1979). Collard’s work serves as a milestone in this field of research, and it has been revisited and

celebrated by many researchers (e.g. Boulding, 1979; Peston, 1979; Cherry, 1980). Collard (1978) designed a theoretical and mathematical foundation through the traditional “Edgeworth box” framework which demonstrates the general equilibrium properties of competitive economics and altruism. General equilibrium properties of competitive economics can be maintained in a case where altruism is non-meddlesome and prevailing of the Kantian outlook (Collard, 1978). If altruism is meddlesome, then Pareto optimality of equilibrium can only be achieved with individuals having to face different relative prices. If each individual is non-Kantian, it leads to free rider problem, where individuals act selfishly expecting altruistic and benevolent activities by others (Collard, 1978). The free rider problem could hinder altruistic individuals from voluntarily transferring resources to other people (Collard, 1978). Only if the strength of altruistic tendencies is beyond some critical level will individuals act voluntarily to provide resources to others (Collard, 1978). In Collar’s work (1978), this critical level is determined by a prisoner’s dilemma framework, and this framework is also used to study how altruism can induce cooperative behavior in situations where act of cooperation is socially preferable to other competitive outcomes (Collard, 1978; Cherry, 1980). Collard (1978) not only discusses the theoretical foundation of altruism in economics, but also demonstrates applications of his findings in realistic economic issues, such as voluntary wage restraint, communes, income, taxation and so on.

Altruism is a complex, multi-dimensional mechanism and it is important to understand its different layers and their interpretations and implications. Over the years, economists and social scientists have introduced different kinds of altruism, such as altruism driven by prosocial behavior (e.g. Olson, 1965; Arrow, 1972; Becker 1974), “warm-glow” altruism where an individual’s act of kindness to the public impacts his or her utility positively regardless of how influential the action is to the society (e.g. Andreoni 1988; 1990), and pure altruism which refers to the kind where individuals care only about public good and society at large (Evren and Minardi, 2015). Altruism has also been associated with feeling ashamed or guilty, because it is assumed that some people perceive prosocial acts and behaviors negatively, or as an obligatory act against their will (Dillenberger and Sadowski, 2012; Noor and Ren 2015, stated in Evren and Minardi, 2015). The very fact that there is an established amount of literature on altruism in subjects such as welfare analysis and social sciences at large shows that giving is generated by many motivations other than altruism – guilt, ethic, sense of duty, recognition and others (Andreoni, 1988). While acknowledging the complexity of altruism, for empirical analysis like this, it is important to

distinguish “warm-glow” altruism, pure altruism and altruism that results from individuals’ prosocial behaviour (Evren and Minardi, 2015).

James Andreoni (1988;1990) disagrees with scholars who theorize that private charity and public goods are motivated by pure altruism. According to Andreoni (1988), proponents of pure altruism model in public goods fail to address the possible crowding out of public goods, evidence of vast participation to charity by Americans (over 85%), and the potential utility gained from the act of giving – suggesting that not all charitable actions to public goods are out of individual's pure altruistic motivations (Andreoni, 1988). Andreoni (1988) argues that arguments for altruistic being pure is insufficient in explaining the true motivation of giving, because it fails to explain the evidence of the free-riding problem in altruistic economies. If pure altruism were the only motivation to donate to public goods or charity given, the proportion of the economy that make donations would eventually shrink to zero and public goods would be provided by the wealthiest individuals in the economy, because those would be the only individuals without any self-regarding motivations (Andreoni, 1988). His earlier work (1988) provides evidence for impure altruism in the economy, and his later work (1990) addresses the existence of "warm-glow" altruism. While the pure form of altruistic giving is extremely rare, when people make charitable contributions to privately provided public goods, they not only gain utility from the increased supply of public goods, they also gain utility from the very act of giving itself (Andreoni, 1990). Another form of altruism is closely associated with “other-regarding preferences”, an individual's decision-making motivation that is related to the well-being of others, contrary to self-regarding or selfish preferences (Robalo et al., 2017; Sen, 1977). Other-regarding preferences are different from pure or warm-glow altruism in that other-regarding preferences separate in-group and out-group members, and how much individuals care about each out-group has an impact on how many sacrifices one is willing to make (Robalo et al, 2017). Other-regarding preferences have attracted the attention of many economists and social science researchers to analyze not only charitable giving motivations of people, but also subjects like political participation and organizational management (e.g. Deutsche, 1949; Robalo et al., 2017; Kocher et al., 2013 respectively). Other-regarding preferences are generally observed in the traditional dictator game experiments as well, which we will discuss later on in this chapter (for a review of classic dictator game, see e.g. Camerer, 2003; Khneman, et al., 1986; Forsythe et al., 1994). In short, the type of altruism that

other-regarding preferences portray is one where people show preferences for fairness when they are given freedom to anonymously divide their wealth (Dillenberger and Sadowski, 2012).

Field experiments conducted by Frey and Meier (2004) analyzed the effects of social context on people’s behavior around voluntary contributions. Their study shows that when individuals are caught in a situation where they need to decide whether to contribute or volunteer in a social dilemma, people care a great deal about having to opt for pro-social behavior (Frey and Meier, 2004). Contrary to standard economic theory of homo economicus, this “conditional cooperation” creates a situation where individuals always suboptimally choose to contribute due to the intuitive incentive that engaging in cooperative behavior provides (Frey and Meier, 2004). The results of this experiment are in line with other related studies. March (1995), for example, argued that people may behave in particular way, or act “appropriately” to align with social norms and Rabin (1993) claimed that people have preferences to fairness and reciprocity. In light of the evidence of pro-social behavior of individuals, Vesterlund (2003) claims that contributions by others may be used as a barometer to determine the quality of public good or the organiations which produce them.

Altruism is a key variable in analyzing people’s behavior to donate or engage in volunteer work (e.g. Andreoni and Miller 2002; Dur and Zoutenbier, 2014; Dur and van Lent, 2017). Although the amount and form of gifts vary greatly, people donate their wealth to a wide range of institutions and causes such as educational institutions, NGOs that aid those in need, environmental agencies, political campaigns, public broadcasting, and small ad-hoc disaster relief volunteering groups (Konow, 2010). There have been a number of field and laboratory experiments conducted to analyze the theoretical and empirical treatments of giving. Many credited behavioral economists have conducted arrays of so-called “dictator game experiments”, where subjects were given choices to dictate allocation of wealth endowed to them in experiments. Kahneman, Knetsch, and Thaler were pioneers in the field; they conducted an experiment in 1986 in which they gave students (subjects) hypothetical options to evenly split $20 with another student or unevenly split the money favoring themselves (Kahneman et al., 1986). The result was that three quarters of the students chose to split evenly with another student, even though they were given an option to unevenly split and take an advantage (Kahneman et al., 1986). Forsythe and his colleagues (1994) expanded the horizon by conducting a dictator game experiment with real stakes with more

realistic consequences, and found similar results; generally, more than 60 per cent of subjects give up positive amount of wealth for others; mean transfer was around 20 per cent of the initial endowed amount (Forsythe et al., 1994). It is important to recognize the limitations of laboratory experiments and the evidence observed. In such game-oriented experiences, participants may be aware that behaving selfishly might yield moral cost, and that can prevent participants from making profit-maximizing choices (List, 2007). This effect is often called framing effects or hypothetical bias, and we need to be cautious in extrapolating the theoretical framework produced in lab experiments to reality (List, 2007).

As shown above, due to the multi-faceted nature of altruism, any attempt to limit the definition and impact of altruism in any context could lead to false results and misconceptions. There is a great deal of opportunity for further research into understanding cultural, social and economic factors that generates giving or prevents people from exhibiting altruism. The next section introduces a concept called public service motivation. Public service motivation is a key concept in research on concepts such as the sorting of employment sectors, management of civil servants and optimal ways to operate the public sector (e.g. Besley and Ghatak, 2005; Delfgaauw and Dur, 2008; Buurman et al., 2012). One of our key assumptions, as discussed extensively in a later chapter, is that employees in public sector are more likely to show altruistic preferences than employees in private sector (see e.g. Perry and Wise, 1990; Perry, 1996; Rainey and Steinbauer, 1990; Wright, 2001; Besley and Ghatak, 2005; Francois, 2007; Delfgaauw and Dur, 2008; Nyborg and Brekke, 2010). Jobs in the public sector often involve helping other people and serving the public, thereby attracting those with higher altruistic preferences (Buurman et al., 2012).

3.2

P

S

M

There are many reasons people choose to work in the public sector. Some people may choose to work for the public sector for the perceived "nine-to-five" working environment, often associated with the bureaucratic errors and reputation of civil servants being lazy (Wilson, 1989; Delfgaauw and Dur, 2008). The less generous incentive structure of public sector organizations may attract people who are less determined to exert effort in their job (Delfgaauw and Dur, 2008). On the other hand, some people may choose to work in public sector because they genuinely want to build a better community, help others, or serve public interest. Studies show that civil servants tend to be highly motivated to provide services to the public even when incentives are small or non-existent

(Delfgaauw and Dur, 2008). Such altruistic motivation observed in public sector employees is referred to as "public service motivation" and it has been a popular concept to address effectiveness of governments and government organizations, as well as the evaluation of employees in social services and their reward systems (e.g. Francois, 2000; Rainey and Steinbauer, 1999; Wright, 2007). Rainey and Steinbauer (1999) defines public service motivation as “general, altruistic motivation to serve the interests of a community of people, a state, a nation or humankind.” Another specification for public service motivation is an "individual's predisposition to respond to motives grounded primarily or uniquely in public institutions (Perry, 1996; Perry and Wise, 1990)" As I demonstrate, there is considerable empirical evidence which suggests that a significant amount of public service motivation is observed in the civil work force (see Francois, 2000; Glazer, 2004; Besley and Ghatak, 2005; Delfgaauw and Dur, 2005; Prendergast, 2007 for review).

The term public service broadly refers to work done by those who work in public sector, at all levels of government (Perry and Wise, 1990). However, it is important to understand that historically, the term symbolizes more than just one's employment. Elmer Staats defines public service as "a concept, attitude, a sense of duty—yes, even a sense of public morality (Staats, 1998 stated in Perry and Wise, 1990)". Frederickson (1997) and Gawthrop (1974, 1998) also recognize that public service entails much more than a sector of employment—it signifies the sense of duty and inner commitment to a cause beyond one's own interest. Their perception of public service reflects the depth and breadth of the connotation associated public service (Perry and Wise, 1990). Public service motivation serves as a crucial element in my research, as my hypothesis has the underlying assumption that those who choose to work for the public sector have higher sense of mission and desire to help others.

Public service motivation consists of several norms, including attraction to public policy making, commitment to public interest, civic duty, social justice, compassion and self-sacrifice (Moshier, 1968; Frederickson 1980; Frederickson and Hart, 1985; Perry 1996). James Perry (1996) conducted a study that translates the theory of public service motivation into a measurable scale by conducting a confirmatory factor analysis (CFA) using the aforementioned norms, followed by statistical tests to assess the validity and applicability. The product of his research was the "Public Service Motivation (PSM) scale" which allows for the assessment of attitudinal changes among civil servants and measurement of differences in motivational orientation across organizations in

the public or non-profit realm (Perry, 1996). Furthermore, Perry’s scale also enables the measurement of ethics such as rationality and norm-based motives that are associated with individuals who seek employment in public sector (Naff and Crum, 1999).

Operationalization of public service motivation is helpful for hiring managers in public sector and non-profit sector. For recruiters in these sectors it is crucial to know what to look for in candidates because individuals with the ethics and characteristics of public service motivation make up well-functioning public organizations, and these individuals are important assets that make public organizations effective (Francois, 2000; Naff and Crum, 1999). Thus, it is in their interest to know how best to attract employees that are public service motivation oriented rather than those motivated by economic incentives. Findings from related studies (Delfgaauw and Dur, 2008; Francois, 2000, 2007; Dur and Glazer, 2008) show that while highly motivated employees are attracted to jobs in public sector or organizations with a specific mission, high salary and benefits could also attract the type of individuals who have little to no interest in gaining intrinsic values from helping others (Brekke and Nyborg, 2010). Thus, employers in sectors such as healthcare, education, civil services and non-profit organizations need to find ways to attract and maintain those with right motivations without relying on economic incentives and rewards (Brekke and Nyborg, 2010; Rainey, 1982). Brekke and Nyborg (2010) narrates the intuition behind this logic; a perfectly competitive job market is thought to be unaffected by the preferences of individuals, thus poorly motivated workers seek employment in jobs that provides them with economic incentives that prevent them from shirking their duty and responsibilities. By keeping wages low in jobs where workers may receive and value intrinsic reward (such as public-sector jobs) which then prevent these altruistic employees from shirking, individuals with strong other-regarding behavior should self-select themselves into public sector jobs, while individuals with strong profit-maximizing behavior should choose jobs with high extrinsic rewards (Brekke and Nyborg, 2010). Thus, while workers in both private and public sectors should be expected to care about their wages to some level, public sector motivations and its behavioral implications are key aspects in public sector recruitment and determining how much effort public sector employers should put in strategic targeting of individuals with seemingly high level of public service motivation (Naff and Crum, 1999).

Many scholars have extended public service motivation to address organizational effectiveness. Francois (2000) and Holtham and Kay (1994) provide evidences that certain public services is cost efficient because it provides an avenue for this type of service ethic to be expressed, thus lowers the price to tax payers. On the similar note, Rainey (1982) argues that the obvious differences in money-based incentives between private and public sector employees is compensated with non-monetary incentives, such as providing opportunities for them to meet their personal altruistic goals. One of the prominent features in the literature of public service motivation is relatively insignificant role that monetary rewards play in this type of ethic (see e.g. Houston, 2005; Brewer and Selden 1998). Evidences show that when even small monetary rewards are present volunteerism tend to decrease because monetary reward crowd out the intrinsic rewards of volunteering (Houston, 2005). In other words, workers with public service motivation who self-select themselves into public sector jobs may be volunteering a part of their services to the community for free (Gassler, 1998). While public service motivation is most often associated with sector-specific studies, it is rather a characteristic of an individual in public organizations than public sector as a whole (Houston, 2005). One reason is that it is the virtue of the public organizations' missions that provide individuals with an opportunity to engage in public service – in other words, individuals are more likely to self-select themselves into public organizations when their mission and the organization's mission align (Houston, 2005; Perry, 2000; Cowley and Smith, 2014; Wright, 2007). In sum, public service motivation is a multi-dimensional element, and it symbolizes motivations of benevolent individuals who choose to engage in pro-social activities. Public sector employers have many variables to consider in operating their organizations – they need to recruit individuals with strong public service motivations while providing sufficient amount of both extrinsic and intrinsic incentives, in addition to proactively encouraging and nurturing such ethic within their organizations.

3.3

M

A

In the previous section, I elaborated on how individuals with public service motivation are more likely to select themselves into public sector. Literature on public service motivation suggest that those with desire to engage in pro-social behavior tend to choose to work for the public sector or non-profit organizations. If external incentives are partially replaced by intrinsic value they receive by engaging in public services, what kind of intrinsic "rewards" do individuals look for?

As mentioned previously, literature suggest that there is a difference in reward preferences in public and private sectors (Boyne 2002; Wright 2001). This difference in reward preferences is thought to have a functional influence on the performance and effectiveness of the organizations (Wright, 2007; Perry and Wise, 1990; Naff and Crum, 1999). Rainey and Steinbauer (1999) argue that task, mission, and public service are the three interrelated intrinsic rewards that individuals gain by working in public sector, and through these rewards employees shape the effectiveness and performance of public organizations. A study done by Perry and Wise (1990) present a theoretical foundation that there is a positive correlation between public sector employee's performance and public service motivation. Their theory goes as follows; the general expectation is that individuals have strong tendency to perform well when they find their work meaningful and impactful (Perry and Wise, 1990; Dur and Glazer, 2008). Those who are highly committed to the organizations are also likely to perform well and have higher tenure with the organization (Perry and Wise, 1999; Wright, 2007). Those with higher commitment to the job or the mission of the organization are more likely to engage in extra tasks or invest more time and effort into their job (Perry and Wise, 1999). Desire to go above and beyond their job description and going extra mile to achieve not just one's mission but also the goals of organization as a whole would likely lead to a good performance review. Thus, if public organizations are successful in attracting individuals with such high mission alignment and commitment, organizational performance and effectiveness are more likely to enhance. Naff and Crum (1999) builds onto Perry and Wise (1990) and respond by providing empirical research to support their theory. The evidences show that employees who have high public service motivation are more likely to have positive opinions about their job, and are more likely to yield higher performance and job satisfaction (Naff and Crum, 1999). On the similar note, Wright (2007) also provides supporting evidences that employees place importance on organizational mission. According to Wright (2007), employees perceive their job as important when there is high mission alignment, and that, in turn, enhances workers’ motivation. Thus, if employees view the organization's mission as important and compatible with their own values, they are more likely to find their work personally meaningful because organizational goals get incorporated into their own values, which is likely to result in employees exerting more effort into their assigned tasks. (Weiss and Piderit, 1999).

Just as public and private sector differ in their reward preferences, the sectorial differences extend to opportunities that they provide to serve the public interests (Dur and van Lent, 2017).

International Social Survey 2015 asked respondents whether their job provided opportunities to help other people, and whether their job is useful to society (Dur and van Lent, 2017). The result was that those holding jobs in public sector scored remarkably higher in both questions compared to those with jobs in private sector (Dur and van Lent, 2017).

CHAPTER

4:

H

4.1

K

A

In the previous section, I have demonstrated the breadth and depth of related literature to provide thorough understanding crucial underlying assumptions of this research. Bellow, I summarize the assumptions in 4 points;

i. Humans are not homo-economicus: although there are evidences that support humans as purely self-interested, utility maximizing economic beings, this research assumes that humans are ethical, moral and altruistic by nature. This is in line with views presented by Smith (1759), Downs (1962), Collard (1978), Weisbrod (1975), Rose-Ackerman (1986), Gassler (1986, 1987, 1990, 1998). Experiments by scholars in behavioral economics also support the theory, providing evidences that people have tendency to act out of fairness, or are at least aware of the moral cost of being selfish and act accordingly (for review see Kahneman et al., 1986; Forsythe et al.,

1994; Camerer, 2003; List, 2007).

ii. Workers in public sector tend to be intrinsically motivated: individuals who are intrinsically motivated tend to sort themselves into public sector jobs. While variations are observed across countries (Cowley and Smith, 2014; Walle et al., 2015), individuals with public service motivation and other-regarding ethics tend to choose jobs in public sector. These individuals show higher altruistic preferences in comparison to those in private sector (Dur and Zoutenbier, 2014; Dur and van Lent, 2017). This assumption is drawn from theories and evidences presented by Francois (2000), Delfgaauw and Dur (2008), Rainey and Steinbauer (1999), Perry (1996), Perry and Wise (1990), Besley and Ghatak (2005) and other literature mentioned in the review of "public service motivation".

iii. Belief that their job contributes to the well-being of others is stronger among public sector employees than private sector employees: public sector jobs tend to involve tasks and duties that allow workers to help others through means of work, for example nurses (Antonazzo et al., 2003), teachers (Edmonds et al., 2002), social workers (Buurman et al., 2012; Blau, 1960) and so on. This assumption is in line with assumptions presented by Dur and Zoutenbier (2014), Cowley and Smith (2013), and

Dur and van Lent (2017).

iv. Mission matters: while workers in both private and public sector are thought to care about extrinsic rewards such as wages, literature suggest that workers in public sector have higher preferences to intrinsic rewards such as certain values and mission alignment (Wright, 2007; Perry et al., 2010; Cowley and Smith, 2013). Thus, organizational goals do matter to public sector employees. This assumption is drawn by theory and evidences presented by Perry and Wise (1990), Wright (2007), Delfgaauw and Dur (2008), Besley and Ghatak (2005) and other aforementioned literature in the section of mission alignment. This assumption is also in line with the researches done by Dur and Zoutenbier (2014), Cowley and Smith (2013), and Dur

and van Lent (2017).

4.2

R

R

My research follows the research models presented in the article by Dur and van Lent (2017) and Dur and Zoutenbier (2014). Dur and Zoutenbier (2014) builds on research done by Besley and Ghatak (2005). Besley and Ghatak (2005) analyze organizational efficiency and incentive structure in mission-oriented organizations in private-public divide. They argue that not all activities in the public sector are mission-oriented – some activities in the public sector are profit driven, and conversely, not all activities in private sector are profit-oriented either (Besley and Ghatak, 2005). Universities for example, have other motivations than maximizing their profits whether they are public or private (Besley and Ghatak, 2005). Public and private divide is not binary, and whether private or public, production of collective goods are pursued by motivations of mission-oriented individuals who choose to work for the mission-oriented organizations (Besley and Ghatak, 2005). Such mission alignment gives workers intrinsic value or benefits – such as doctors whose

motivation is to save the lives of others, researchers who strive to advance knowledge, and solders who enlist out of the desire to defend their country (Besley and Ghatak, 2005).

Dur and Zoutenbier (2014) builds onto the mission-alignment concept outlined by Besley and Ghatak (2005) and develops a model to analyze an individual’s choice of employment in an economy where people differ in altruism and mission preferences. They find evidence that altruism and mission alignment have a mutually reinforcing effect, particularly in determining the worker’s likelihood to take a job in the public sector (Dur and Zoutenbier, 2014). They find that the marginal effect of a worker’s mission alignment on his or her likelihood of working in the public sector is insignificant for workers with low altruistic preferences, while it is positive and statistically significant for workers with high altruistic preferences (Dur and Zoutenbier, 2014). The same pattern applies to mission alignment – the marginal effect of a worker’s altruism on the probability of working in public sector increases as the level of mission alignment increases (Dur and Zoutenbier, 2014). These findings coupled together indicate that workers with strong altruistic preferences and high mission alignment with public organizations are significantly more likely to end up in the public sector than those who do not meet a sufficient level in at least one of these categories (Dur & Zoutenbier, 2014).

Dur and van Lent (2017) takes the evidence from Dur and Zoutenbier (2014) further. They predict that given the altruism and intrinsic values public sector employees receive through their job, public sector workers engage in charitable activities less outside work compared to workers in private sector. The intuition behind this assumption is that public sector workers receive the avenue to contribute to well-being of others through their job already, and thus by a substitution argument, they engage in philanthropic activities less outside their job (Dur & van Lent, 2017). Their research consists of a model where the baseline assumption is that people take altruistic actions in three aspects; their job (public or private), how much effort they put in the job, and how much of their income they donate to charity (Dur & van Lent, 2017). They consider altruism to be impure as argued by Andreoni (1990) where altruism gives people “warm-glow” utility by doing good to others or contributing to other people’s well-being, but they do not have emotional attachment to other people’s utility – in other words, they help others only to the extent in which their own utility increases (Andreoni, 1990; Dur and van Lent, 2017). While many of the previous studies used workers’ behavior outside their workplace or charitable donations made as a measurement of

altruistic preference, Dur and van Lent (2017) assume that individuals altruistic preferences are expressed within their job as well as outside their job. The important assumptions in their research are that; (a) services provided by public sector are more likely to increase the well-being of others than services provided by private sector, (b) donating money to charity is a way for workers in either of the sectors to help others and contribute to the public, and (c) making charitable donations and exerting effort into public sector jobs are perfect substitutes in enhancing the well-being of others (Dur and van Lent, 2017). Thus, by holding these assumptions, workers with public sector jobs are less likely to make charitable donations than workers in private sector, given the average level of altruism (Dur and van Lent, 2017). This is particularly the case when jobs in the public sector provide ample opportunities to serve the public needs and interests, such that workers in these jobs feel even less of an urge to make effort outside of work to help other people (Dur and van Lent, 2017). Their findings show that the amount of donations made increases with self-reported altruistic preferences, and for a given level of altruism, public sector employees make 32.15 euro less in donations than private sector workers do in a given year (Dur & van Lent, 2017).

Their research also found evidence that older workers in the public sector do more than half an hour less of voluntary work per week on average compared to their counterpart in private sector (Dur and van Lent, 2017). This is in line with findings from Burrman et al. (2012) that workers with longer history of working in public sector tend to donate to charity less, while such tenure effect is unobservable in private sector (Burrman et al., 2012). Evidence from Dur and van Lent (2017) also suggest that those who claim to have voted for one of the political parties that is in office show small increases in volunteering for non-government workers, while it reduces the amount of volunteering done by government workers. Given these empirical evidences and based on my theoretical analysis, my main hypothesis is as follows;

Hypothesis: given higher altruistic preference of public sector workers compared to that of private sector workers, increase in the level of organization-persona mission alignment decreases the likelihood of them volunteering or engage in charitable activities, because higher mission-alignment gives them higher intrinsic value and reward, such that they feel less of a need to engage in charitable activities outside their work

My research differs from Dur and van Lent (2017) in that where they use panel data from Germany and the Netherlands only, my research examines survey data provided by the World Values Survey

Association. The data consists of survey responses of over 82,000 respondents across 58 countries around the world. Dur and Zoutenbier (2014) rely on the same set of data from the World Values Survey Association (WVS) in their analysis. The survey data from the WVS is rich in variation, ranging from wealthy and developed countries to developing countries in Asia, South America, Africa and Middle East. The diverse set of data allows for comparative analysis between countries with matured economy and those without. Such analysis could be useful in explaining interesting phenomenon of highly altruistic behavior of people in less-developed countries. List and Price (2011) analyzes charitable giving around the world and ranks countries according to different types of charitable giving, such as gifts of money, gifts of time, volunteering and helping strangers. The research places a strong emphasis on exploring the mechanisms behind why non-Westerners give, despite their lower GDP per capita (List and Price, 2011). Their research shows that while Australasia (Australia and New Zealand), North America and Western and Southern Europe rank as the top 3 countries in terms of giving money to charity, Turkmenistan, Sri Lanka and Central African Republic rank as the top 3 countries in individuals volunteering time in a given year (List and Price, 2011). Furthermore, when it comes to helping strangers, Liberia, Sierra Leone and

Sudan rank as the top 3, followed by Canada in the 4th _{place (List and Price, 2011). None of the}

top 3 countries are OECD countries.

There are a few studies that shed light on how people in developing countries choose to work for public sector with the motivation to help others. Serneels et al. (2007) show that desire to help the poor is one of the most valued intrinsic motivations for students entering the medical profession in relatively underprivileged rural areas in Ethiopia. Serra, Serneels, and Barr (2011) provides evidence from both survey and lab experimental data that health professionals in Ethiopia who are pro-socially motivated tend to choose to work in non-profit sector. Cowley and Smith (2014) analyze the diversity of intrinsic motivations of public sector workers across countries using survey data from WVS. Their results show that higher intrinsic motivation in public sector (in comparison to private sector) observed in previously published related studies is not a universal tendency (Cowley and Smith, 2014).

The remaining part of this research paper proceeds as follows; it begins by introducing the survey data used in this research and how the independent and dependent variables in my regression analysis are operationalized. The following chapter introduces the research method, including the

specifications of the main regression equation. Then the results of the regression analysis and their implications are discussed. I address some of the limitations of the research and then end with concluding remarks.

CHAPTER

5:

D

V

5.1

D

I test key predictions using data from the World Values Survey, conducted by the World Values Survey Association. We use data from the survey carried out between 2005 to 2008 (Wave 5), which contains one year of observations for each country. I did not include previously published survey data (Wave 1 to 4) as they do not include questions about altruism and employment sector. The newest survey data (Wave 6) was conducted between 2010 to 2014, and it would have been ideal to use the newest data, however the number of responding countries differed across questions, and for that reason I am using the data from Wave 5 (2005-2008). The total number of respondents is 82,992. Respondents answered questions on a wide range of topics, including social, cultural, and political attitudes and a large set of demographics. Questionnaires were carried out face-to-face apart from Japan and Australia, where paper-and-pencil questionnaires were administered. There is a diversity in countries in terms of economic and political development, from wealthy and relatively stable OECD (Organisation for Economic Co-operation and Development) countries to less developed countries with political and economic instability.1 _{For the remaining section I}

provide description of dependent variable, explanatory variables and control variables in my

regression estimation and how the variables are constructed using the survey data.

5.2

D

Volunteerism

My outcome variable is “volunteerism”, which consists of series of 9 questions that asks individuals whether they are active members in various voluntary organizations. The individuals are asked to choose “active member”, “inactive member”, or “don’t belong” to any of the following organizations; church or religious organizations, sport or recreational organization, art, music or

educational organization, labour union, political party, environmental organization, professional association, humanitarian or charitable organization, consumer organization, or any other voluntary organization. For each question, I have eliminated participants who scored “missing”, “not asked”, “no answer”, and “don’t know” categories. I also combined the participants who answered “not a member” and “inactive member” into one category, since we are interested in participants who proactively engage in any voluntary activities, thus even if respondents claim to be a member of voluntary organizations, if they are not actively engaging in charitable work then they are equal to those who don't belong to any voluntary organizations. After combining all 9 questions into one variable, this variable became a continuous variable with a scale of 0 to 10. However, because we are only interested in the fact that respondents engage in volunteer activities, and not necessarily how many they engage in, we have compressed this variable into a dichotomous dummy variable, grouping all respondents who engage in at least one voluntary organization. For those in scale of 1 to 10 were grouped into 1, meaning, those who claim to be very active in many voluntary organizations (10) and those who claim to have been active in at least one (1) are grouped into the same category. Thus, the dependent variable "volunteerism" equals to 1 if respondents stated to be an active member of at least one of the organization types listed in the questions, and 0 if respondents stated to be an inactive member, or don’t belong to any of the organizational types. This process trimmed down the number of participants to 49,338, and of which 62.8% are inactive in any voluntary organizations, and 37.3% active member of at least one or more voluntary organizations. Note that throughout this paper, volunteering, charitable activities, voluntary activities and philanthropic activities are used interchangeably.

5.3

I

V

Sector of employment

This variable is taken from a question in the survey that asks respondents to identify the sector of employment that they work in. The respondents were asked to identify the sector of employment they belong from "government or public institution'', "private business or industry'' and "private non-profit organization". For this variable, I have eliminated respondents who scored “missing”, “not asked”, “not applicable”, “no answer”, and “don’t know” from the sample. I have also eliminated those who answered "private non-profit organization", as the classification of this sector is ambiguous. This approach is in line with that of Dur and Zoutenbier (2014), as they also

eliminate the respondents that belong to private non-profit organizations. This process brought the total number of observation to 45,542 with 70.55% of observations belonging to private sector and 29.45% belonging to public sector.

Mission alignment

Individuals mission alignment with public organizations is hard to operationalize, as recognized by Dur and Zoutenbier (2014) as well. Following their research, I use "confidence in political parties" as a way to operationalize individuals' mission alignment. In doing so, I assume that employees who express high confidence in political parties do so in part out of a belief that the mission of the political party in alignment with their own (Dur and Zoutenbier, 2014). For these workers, employment in the public sector would contribute to the public good; however, the same may not hold for workers with low confidence in political parties, who do not perceive contributions made in public service as public good (Dur and Zoutenbier, 2014). Participants were asked to identify their level of confidence in political parties by selecting a point from a four-point scale. The scale ranges from "none at all", "not very much”, “quite a lot”, and “a great deal”, and the scale increases as the confidence increases. Again, I have eliminated respondents who scored “missing”, “not asked”, “no answer”, and “don’t know”, trimming the number of respondents to 74,020.

This operationalization is not without its limitations. While political parties certainly contribute to the mission of the public sector, the reality is layered and complex (Dur & Zoutenbier, 2014). Dur and Zoutenbier (2014) also recognizes this limitation in their research, however, justifies it by the discussion provided by Miller (1974) and his work. Miller describes confidence in political parties as a component that reflects “the belief that the government is operating according to one’s normative expectations of how a government should function (Miller, 1974, p.989. As cited in Dur and Zoutenbier, 2014, p.147). For these reasons, I operationalize one's mission alignment with public organizations using respondents' expressed confidence in political parties and assume that

higher confidence yields higher mission alignment.

Altruism

In testing my hypothesis, I control for altruism in my regression. The reason for this stated in the main assumptions section above; we assume that humans are not selfish by nature, and they are