Totally agree that EA jobs provide scarce non-monetary goods, and hat tip for looking at this issue through a standard economics lens.
I’ve argued that compensation norms based on offsetting low salaries with high non-monetary pay are problematic in part because they create unwanted biases in which sorts of candidates they attract. If you pay people with money, they can use that however they want. If you pay them in e.g. flexible hours or social status, there’ll be variability in how much people value that and you’ll disproportionately attract candidates who value it a lot. For example, I argue experienced candidates will likely prefer monetary compensation relative to inexperienced candidates for several reasons:
Low salaries make it relatively harder to find experienced candidates than inexperienced ones because of several factors that shift the labor supply curves on a relative basis:
● Earning power in alternative jobs. Experienced candidates generally have better paying alternatives than their inexperienced counterparts (i.e. they have higher opportunity costs). Experienced candidates will often be sacrificing hundreds of thousands of dollars or more to work for an EA organization; that would be very rare for junior candidates.
● Barriers to entry: Experienced candidates are more likely to have dependents and mortgages, and for them working at an EA organization is more likely to involve a psychologically difficult large pay cut. Inexperienced candidates, on the other hand, may see working in EA as the path of least resistance.
● Non-monetary compensation. As Milan Griffes has argued, EA jobs provide scarce non-monetary goods like “social status, life-orientation, a sense of having near-maximal impact, and being part of a value-aligned, elite tribe.” Younger candidates likely perceive more value from these particular factors. (More experienced candidates, by contrast, would likely perceive relatively more value on non-monetary compensation in the form of flexible working hours or paid parental leave).
Totally agree that EA jobs provide scarce non-monetary goods, and hat tip for looking at this issue through a standard economics lens.
I’ve argued that compensation norms based on offsetting low salaries with high non-monetary pay are problematic in part because they create unwanted biases in which sorts of candidates they attract. If you pay people with money, they can use that however they want. If you pay them in e.g. flexible hours or social status, there’ll be variability in how much people value that and you’ll disproportionately attract candidates who value it a lot. For example, I argue experienced candidates will likely prefer monetary compensation relative to inexperienced candidates for several reasons: