All Are Not Equal: An Examination of the Economic Returns to Different Forms of Participation in Open Source Software Communities

Abstract

Open source software (OSS) communities live and die with the continuous contributions of programmers who often participate without direct remuneration. An intriguing question is whether such sustained participation in OSS projects yields economic benefits to the participants. Moreover, as participants engage in OSS projects, they take on different roles and activities in the community. This raises additional questions of whether different forms of participation in OSS communities are associated with different economic rewards and, if so, in which contexts. In this paper, we draw upon theories of signaling and job matching to hypothesize that participants who possess “proof” of their skills in OSS projects are financially rewarded for their activities in the labor market. More specifically, we distinguish between participation in OSS communities that is associated with a signaling value for unobserved productivity characteristics and an additional value that accrues to participants whose OSS roles and activities match those in their paid employment. Following a cohort of OSS programmers over a six-year period, we empirically examine the wages and OSS performance of participants in three of the foremost OSS projects operating within the Apache Software Foundation. Controlling for individual characteristics and other wage-related factors, our findings reveal that credentials earned through a merit-based ranking system are associated with as much as an 18% increase in wages. Moreover, we find that participants who have OSS project management responsibilities receive additional financial rewards if their professional job is in IT management. These findings suggest that rank within an OSS meritocracy is a credible and precise signal of participants' productive capacity and that participants' roles and activities in an OSS community have additional financial value when aligned with their paid employment.