Unpaid Work encompasses all forms of work that are not compensated by any form of wage
Raghunath Mahapatra
‘Unpaid Work’ (which includes unpaid care and domestic work) includes all non-remunerated work activities being performed in the households, while ‘Paid Work’ refers to time contracted out that receives remuneration. In simple terms, unpaid work (home or non-market activities) encompasses all forms of work that are not compensated by any form of wage.
With available data from the 15 member economies, a study published by the Asia-Pacific Economic Cooperation (APEC), in 2022, reveals that women allot at least 2.6 hours and as much as 5.5 hours daily doing unpaid work, almost three times the time spent by men. The study has marked a widespread disparity in the value of unpaid work across economies, from as low as 5.5% of GDP to as high as 41.3% of GDP among the APEC economies.
Real Figures
The International Labor Organization (ILO) estimate claims that the value of unpaid care and domestic work would be as much as 9% of the global GDP ($11 trillion) and out of that women contribute around 6.6% compared to men’s 2.4% contribution. Every day, more than 16 billion hours are devoted to unpaid domestic and care work around the world. As the global population ages, these figures are set to rise, with a disproportionate impact on women, the ILO warns.
The international NGO reports that women carry out 12.5 billion hours of unpaid care work every day and when valued at minimum wage this would represent a contribution to the global economy of at least $10.8 trillion a year (more than three times the size of the global tech industry). The report also claims that in low-income countries, women in rural areas spend up to 14 hours a day doing unpaid care work and 42% of women cannot get jobs (compared to just 6% of men) because they are responsible for all the care giving jobs in and outside the house.
Even though it lays the foundation for a thriving society, it’s often treated as ‘non-work’ and spending on it treated as a cost rather than an investment, even though without someone investing time, effort and resources in these essential daily tasks, the communities, workplaces and whole economies would grind to a halt, OXFAM claims.
The State Bank of India (SBI)’s Eco wrap report released in the first quarter of 2023 opines “To understand the status of women in the labor market, it is necessary to comprehend the nature of their unpaid work, which has a significant impact on their work participation rate in the economy”. The report estimates that the average time spent on this unpaid work per participant aged 6 years and above is around 432 minutes (7.2 hours) in India in a day. It assumes a monthly income loss of Rs 5,000 for rural women and Rs 8, 000 for urban women; which they would have received had they worked for 8 hours a day.
“Our analysis indicates that the total contribution of unpaid women to the economy is around Rs 22.7 lakh crore (rural: Rs 14.7 lakh crore and urban: Rs 8 lakh crore) which is almost 7.5% of India’s GDP,” the report said. In its attempt to quantify unpaid work, the United Nations has said that unpaid care and domestic work are valued to be 10% to 39% of the GDP and can contribute more to the economy than the manufacturing, commerce or transportation sectors. Of course, this analysis was not restricted to just India.
New Method
It’s been nearly 80 years since British economists James Meade and Richard Stone devised a method of national income accounting that would become the global standard. Today, we call it a country’s gross domestic product (GDP). Their method estimates the monetary value of all “economic” production (actually bought and sold) that took place in a country in a given year for the calculation of its national income.
But during the process of applying this method as the accounting system in the British Colonies (present-day Malawi and Zambia (in 1941) Phyllis Deane, a British economic historian realized that it was an error to exclude unpaid household labor from GDP. Deane believed that DP in this form excludes a great share of productive activities of the economy. She felt that it was “illogical” to exclude the economic value of preparing/cooking food and collecting firewood from the estimation.
As GDP calculations come under increasing criticism, the research and views of Deane attain prominence and economists & experts try to develop various alternative methods to attach value to the economically productive non-market housework activities, despite the difficulties associated with the measurement of the symbolic/ subjective benefits of housework.
Among the three ways devised till now, the ‘Opportunity Cost Method’ measures the value of unpaid domestic work by calculating the amount of money the domestic workers could be making while working in the labor market instead of doing unpaid work. ‘Market replacement cost method’, on the other hand, measures the value of unpaid domestic work by calculating the monetary cost of purchasing that service instead.
The ‘Input/Output Cost Method’ measures the value of unpaid domestic work by calculating the monetary value of the economic goods and services produced and how much these goods and services would sell for in the open market. Realizing the importance of unpaid work in national income, countries like Australia (50.6% of GDP), Canada (between 25.2% & 37.2%) and Latin America & the Caribbean (21%) have estimated the economic value of unpaid work in their GDP (though not directly).
Hidden Sector
Time-use survey data and the ‘construction of parallel satellite accounts’ have made the contribution of household production more transparent nowadays and for those countries with available time-use data, satellite account estimates range from an additional 20% to 60% of GDP, which highlights the contribution of this hidden sector to the economy and, in particular, women’s contributions to the economic well-being of a nation. It’s also more important than assigning monetary value to the contributions of the household production system as awareness of unpaid labor’s value leads to the recognition that the three sectors, the household, market and government are structurally interlinked at the economic level.
Accepting such a vision implies that while investigating questions related to growth, as well as fiscal, monetary, international trade and financial sector policies, the household production sector should not be viewed as an add-on or afterthought. It should be viewed as one of the fundamental building blocks of the economy. The OXFAM’s opinion that “Care work is the ‘hidden engine’ that keeps the wheels of our economies, businesses and societies turning” should be the guiding principle when we construct the GDP of a nation, at least in the future.
(The writer is a former Senior Project Associate at HSS Department, IIT Kanpur)
