The Economic Genius of Volunteering

British social scientist Andy Haldane recently waxed numeric over the economic, personal, and social benefits of volunteering. And in the United States, which has the third highest rate of volunteering in the world, that’s good news. (The US sits behind Shri Lanka and Turkmenistan, whose government declares days of “compulsory volunteering”).

More than 1 billion people volunteer around the world annually but because they do not receive taxed income, the economic effect of their efforts is excluded from GDP calculations. In England, for example, 1.25 million volunteers contribute roughly $39 billion of economic activity annually, accounting for 1.5% of national GDP.

Haldane also measured the personal benefits derived from volunteering. After having employment and being in good health, volunteering was shown to have the greatest impact on well-being. On average, an individual would need to be paid an extra $3,900 per year to forego the wellness benefits of giving their time away to a good cause.

“And then there are the social benefits. Helping homeless people off the street has, in econo-speak, significant “positive externalities”: improved employment and income prospects, lower criminal activity, lower risk of mental-health problems, and so forth.”

To derive more personal and economic satisfaction from volunteering, Harvard professor Michael Porter argues that people’s professional skills should be more aligned with their volunteer efforts. Essentially he argues that having highly qualified professionals clean up roadside garbage is inefficient. But if people are paid in their professional life for their most essential skills, is it fair to ask them to give up their bread and butter?