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Monetary valuation of unpaid care work

The unpaid time that people devote to the care of family, friends and neighbours clearly contributes to economic living standards, social well-being and the development of human capabilities. At the same time it enables indi- viduals to engage in the various forms of paid work in the economy. Yet while paid work is assigned a mon- etary value and features in national aggregates such as GDP, unpaid work remains largely unmeasured by such a metric and consequently invisible in discussions of economic policy. 

Things are changing—due at least partly to UN resolutions insisting on improving the visibility of women’s unpaid work—and many countries now administer na- tionally representative time use surveys asking individu- als to recall their activities during the previous day. Over 2000–2010 at least 87 such surveys were conducted, more than over 1900–2000. Estimates of hours worked in providing various household services provide a ba- sis for imputing a market value by asking how much it would cost to procure an equivalent number of hours of similar services from the market. This is valuation by a replacement cost—other approaches are possible, but this one is widely applied. The value of unpaid work contributions cannot always—or fully—be captured in market terms, but estimates of its monetary value, like efforts to estimate the value of unpriced environmental assets and services, can provide important insights. 

Unpaid household work that leads to the production of goods (such as food for own consumption or collection of firewood or water necessary for the household) is considered part of production by the System of National Accounts, and most estimates of GDP include approxi- mations of the value of this work. However, unpaid care work, such as meal preparation, housecleaning, laundry, water and firewood fetching and care of children, are explicitly excluded. 

 

Although time use surveys do not capture all forms of care work, they are useful for better estimating the total number of hours devoted to unrec- ognized and undervalued forms of work.

Valuation efforts, often inserted into “satellite ac- counts” that revolve around the conventional estimates, have gradually been gaining ground in national income accounting and are illuminating. Across a range of coun- tries the results show that time devoted to unpaid care is not optional or idiosyncratic but carefully structured to meet routine family needs, especially the care needs of children, older people and those who are disabled or sick.

Among all countries that are attempting to measure the value of unpaid care work, estimates range from 20 percent to 60 percent of GDP.1 In India unpaid care is estimated at 39 percent of GDP, in South Africa 15 per- cent.2 Among Latin American countries the value is es- timated at 26–34 percent of official GDP for Guatemala and 32 percent for El Salvador.

In 2008 the Organisation for Economic Co-operation and Development published estimates of household production in 27 countries using a replacement cost ap- proach, which highlighted that the value of household production as a share of GDP varies considerably across countries. It is above 35 percent in Australia, Japan and New Zealand and below 20 percent in the Republic of Korea and Mexico, countries with lower GDP.

A greater acceptance of such valuations can help direct national policies. For example, in developing countries women spend a substantial amount of time tending to basic family needs, and access to clean wa- ter and modern energy services would greatly improve their productivity. However, estimates of the payoff to public investments typically does not take the value of such nonmarket work into account. Doing so could change how resources are allocated and projects prioritized for implementation.