Volunteering Provides Vast - and Usually Uncounted - Economic Impact

There is a lot we don't know about the economy. Intangibles - those forces that affect economic performance but are almost never captured by audited financial statements are growing in importance as the shift from an industrial to a technologically-driven global marketplace accelerates.

As their significance becomes better understood, more effort is being dedicated to identifying and measuring these forces. Among those inputs to the new wealth of nations are the efforts of volunteers, those people, often employed elsewhere who devote their time and energy to causes they deem worthy. Determining the exact value of that 'worth' is beginning.

The impact can be measured in both financial and labor market terms. As the following article explains, the number of people hours involved is second only to that expended by China's citizens, the largest workforce on earth. The monetary value of the time volunteered is in the billions.

The question this raises is whether national accounts should track this expenditure in order to better arrive at a more accurate assessment of costs and benefits, as part of a more detailed understanding of how human capital is generated, expended - and attributed. JL

Jason Douglas reports in Real Time Economics:

Tot up the global economy’s army of volunteers and the workforce of “Volunteerland” is about 971 million people, second only to China’s 1 billion workers.
Volunteering—unpaid, non-compulsory work, according to the International Labor Organization—is big business. Andrew Haldane, the Bank of England’s chief economist, has taken a stab at estimating just how big and his conclusions are striking.
Mr. Haldane helped found an outfit in the U.K. called Pro Bono Economics that matches community-minded economists with charities seeking to measure the impact of their actions. A lecture delivered to fellow economists Sept. 9 was part sales pitch to persuade his audience to sign up and part exploration of the value to society of volunteering.
A 2012 survey in the U.K. found 44% of respondents had done some unpaid work in the previous 12 months and around a third volunteered more than once a month. That adds up to 2 billion hours a year spent volunteering. Add in informal volunteering—driving your neighbor to hospital, for example—and the number of hours worked more than doubles, Mr. Haldane calculates.
Volunteering is popular in many other countries, too. Tot up the global economy’s army of volunteers and the workforce of “Volunteerland” is about 971 million people, second only to China’s 1 billion workers.
So how much is such activity worth to an economy? Since it is hard to measure what volunteers produce, Mr. Haldane estimates their contribution by working out the value of how much they put in—their labor. Volunteers’ contribution to the U.K. economy could be anywhere up to £50 billion ($81 billion), he says, the equivalent of the annual output of Britain’s energy sector.
Volunteering has other economic benefits, Mr. Haldane argues. Workers who volunteer in their spare time tend to be happier and more productive. Volunteering may also enhance employees’ skills and boost their attractiveness to potential employers.
Some types of volunteering aid the economy by preventing harm: one Pro Bono Economics study found that a charity that helped young homeless people find work and in some cases get off drugs generated a return to society of £2.40 for every £1 invested.
Volunteering is “a well-hidden jewel” in the global economy, Mr. Haldane says.
“The potential economic and societal benefits from volunteering then risk remaining untapped,” he said.