What is it about?
The article investigates the differences in socioeconomic determinants of the size of the nonprofit sector serving households in the wealthy and less wealthy OECD countries. Based on panel data modelling of 22 wealthy OECD countries and 17 less wealthy OECD countries in the longterm period 2000–2014, authors revealed distinctive determinants of the size of the nonprofit sector serving households in the wealthy and less wealthy countries. The model identified GDP per capita, government health care expenditures per capita, number of refugees per hundred thousand inhabitants and unemployment rate as significant long-term determinants of the size of the nonprofit sector in the wealthy OECD countries. Alternatively, GDP per capita, age and educational structure are significant long-term determinants of the size of the nonprofit sector in the less wealthy OECD countries. Authors found opposing effect of GDP per capita on the size the nonprofit sector between the two groups of countries.
Featured Image
Why is it important?
The size of nonprofit sector also depends on whether the support and services provided by the government are substitutes or complements to the services provided by nonprofit organizations. In the wealthier countries, the government health care competes with nonprofits since the government support has been substituted by the nonprofit sector. Conversely, the nonprofit sector plays a vital role during social crises when the number of refugees and the unemployed people increases. In the less wealthy countries, a dimension of the nonprofit sector does not respond significantly to changes in the number of refugees, users of health care and the unemployed, but it responds to the age structure of the population. With the aging population, the needs of seniors are mostly covered from the state budget. Moreover, government and/or regional self-governments establish senior care homes, which directly compete with nonprofit institutions dealing with care for the elderly. The government thus reduces the space for nonprofit organizations that also provide services for seniors. So, the demand for social services is often provided by commercial entities.
Perspectives
One of the opportunities for further research could be a confirmation of the theory by Carmen Marcuello (1998). The theory declares that the effect of the country’s wealth to the size of the nonprofit sector serving households depends on the structure of the activities of the nonprofits regarding the non-rivalry and non-excludability of consumers from using the services of nonprofit organizations. The results suggest that there are differences between the wealthier and less wealthy countries but the theory must be empirically proven.
Dr Jindřich Špička
University of Economics, Prague
Read the Original
This page is a summary of: Selected Socioeconomic Determinants of the Size of the Nonprofit Sector Serving Households in the OECD Countries, Prague Economic Papers, July 2019, University of Economics,
DOI: 10.18267/j.pep.671.
You can read the full text:
Contributors
The following have contributed to this page
