Economic Incentives for Participating in Open Source Software Projects

Using the Internet as a basis for communication, collaboration, and storage of artifacts, the open source community is producing software of a quality that was previously thought to be achievable only by professional engineers following strict software development paradigms. This accomplishment is even more astounding as developers contribute to the source code without any remuneration. Open source leaders as well as academics have proposed theories about the motivation of open source developers that are rooted in diverse fields such as social psychology and anthropology. However, Lerner and Tirole (2000) argue that developer participation in open source projects may, in part, be explained by existing economic theory regarding career concerns. This research seeks to confirm or disconfirm the existence of economic returns to participation in open source development. Our findings suggest that greater open source participation per se, as measured in contributions made, is not associated with wage increases. However, a higher status in a merit-based ranking within the Apache Project is associated with significantly higher wages. This suggests that employers do not reward the gain in experience through open source participation as an increase in human capital. The results are also consistent with the notion that a high rank within the Apache Software Foundation is a credible signal of the productive capacity of a programmer