Is there a wage premium for volunteer OSS engagement? – signalling, learning and noise

Volunteer-based open-source production has become a significant new model for the organization of software development. Economics often pictures this phenomenon as a case of signaling: Individuals engage in the volunteer programming of open-source software (OSS) as a labor-market signal resulting in a wage premium. Yet, this explanation could so far not be empirically tested. The present paper fills this gap by estimating an upper-bound composite wage premium of voluntary OSS contributions and by separating the potential signaling effect of OSS engagement from other effects. Although some 70% of OSS contributors believe that OSS involvement benefits their careers, we find no actual labor market premium for OSS engagement. The presence of other motives such as fun of play or altruism render OSS contributions too noisy to function as a signal.