Wage differentials in social enterprises

In Italy social enterprises include more than 7,000 institutions with around 250,000 workers serving more than three million people, a big share of which disadvantaged. Using the ICSI 2007 survey conducted by a pool of Italian universities on a representative sample of social enterprises, we analyze the determinants of nominal and real wages (adjusted for the cost of living in the area of residence). Our two main findings show that: i) low wages and absence of “direct” education premia make it hard to attract (beyond intrinsic motivations) young talented workers in this sector even though indirect premia in terms of higher probability of becoming manager exist; ii) cooperative wage differentials are sensitive to regional disparities in PPP even though they do not fully compensate for them: nominal wages are higher in Northern Italy but, after adjusting for the cost of living, they become higher in the South.