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I'm wondering if there is a method by which we can visualize a firms decision to rely on volunteer labour. I have an idea but I'm unsure if it is correct, please tell me if there is an issue with my understanding.

I posted here about the issues with looking at volunteer labour with labour market models driven primarily by wage rate to determine the individuals decision of entry to a given labour market, however from the firms end I think there might be a way to look at its decision to primarily employ volunteer labour.

In the picture below I have a slightly modified version of a the labour market to describe the non-profit sector. The labour demand $N_d$ is the same however the labour supply $N_s$ is shifted right and some of the curve is below the wage of zero, indicating the individuals on this end of the labour supply curve would pay to do such work for such a firm.

This abnormal behaviour of an individual working for free or even paying his employer can be in reference to what is called by Richard Freedman the purchase of "conscious goods or services".

The implications this graph has is that there is an "oversupply" of labour or a specific type of labour (usually general labour in the case of the volunteer sector), to the point the firm does not need any more workers, "Maxing out their inputs" therefore they won't pay for such readily available labour at all.

Again I am posting this model here to see if there is an issue with my understanding or if there is anything for the SE community to add. Volunteer Labour equilibrium

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  • $\begingroup$ In that model, is it possible to have a negative wage at equilibrium? (it will be to the right in the plot) $\endgroup$ – Robert Aug 1 '16 at 13:18
  • $\begingroup$ That would seem to be the case. Volunteer trips would seem to be the best example of such a scenario i.e volunteerhq.org/volunteer-abroad-programs/… $\endgroup$ – EconJohn Aug 1 '16 at 16:13
  • $\begingroup$ I haven't really found much on graphing such labour market behaviour, this is just a hunch. $\endgroup$ – EconJohn Aug 1 '16 at 16:14

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