AN EMPIRICAL ANALYSIS OF ECONOMIC RETURNS TO OPEN SOURCE PARTICIPATION

Relying on volunteer labor, open source projects like the Apache web server create commercial quality software. Why developers contribute freely without direct remuneration has been widely debated. We offer empirical evidence that such participation can be explained by existing theories in labor economics. Analyzing panel data covering a four-year period, we find that increases in human capital, measured as project contribution, do not lead to increased wages. In contrast, credentials earned through a merit-based ranking system are associated with significantly increased wages. Our results suggest that status within an open source meritocracy operates as a credible signal of productive capacity.

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