Giving It Away for Free? The Nature of Job-Market Signaling by Open-Source Software Developers

Much work has been done in recent times to answer the question of why people contribute, and continue to contribute to open-source and free software, despite the lack of immediate financial gain in most cases. Lerner and Tirole (2002) hypothesize that open-source contributions act as a form of job-market signaling - they permit prospective employers to judge a person's ability directly. This paper tests the nature of this signaling using a complementarity framework. Do developers use open source software as a way to enhance the signal from a college education, or to substitute for it, in a form of learning by doing? I find evidence that they are complements, while conclusively rejecting the idea that they are substitutes.