Unpaid Work, National Accounts,
Economic Analysis and Economic Policy
Diane Elson
Emeritus Professor, University of Essex
Seminar on Unpaid Work and National Accounts
Lima 22-23 October 2013
Analysis of National Economies:
Gender Neutral or Gender Biased?
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National output, income and expenditure
Savings and investment
Flows of money, labour, goods and service
Stocks of assets: physical, financial, human
Policy issues: employment , inflation, budget deficits,
economic growth
• No mention of men or women
• Appears to be gender-neutral but is it?
• Lack of support for inclusive and equitable economic growth
because of lack of recognition of unpaid work
Structure of Presentation
• Unpaid Work in the National Economy: A Framework for
Analysis
• Unpaid Care and Volunteer Work and the System of National
Accounts
• Unpaid Work and Growth of GDP
• Differences between Paid Work and Unpaid Work
• Public Expenditure, Public Services and Unpaid Work
• Conclusions: Recognize, Reduce and Redistribute Unpaid
Work
Understanding Economies from a Gender Perspective
Formal paid work
Informal work:
Paid and unpaid
Labour Services
Good and services and monetary flows
Business sector: agriculture, industry and services
Public Sector
Non profit institutions
Formal paid
work
Formal paid
work
Informal work
Paid and unpaid
Volunteer work
Household Sector
Informal paid work
Unpaid work:
Subsistence and Care Work
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SNA and Unpaid Work
• Paid domestic work always included in the SNA , tends to be
underestimated in the GDP statistics because of its informality.
• Agricultural subsistence production always included in the SNA, tends to
be underestimated in the GDP statistics because it is non-market.
• Other types of subsistence production, such as collection of water and
fuel initially excluded, but revisions to the SNA subsequently included
them; however, national statistical systems have not kept pace and most
do not try to include this production in GDP;
• Unpaid care work not included in the SNA and rarely included in the
statistics, but now recognized as activity within the production boundary,
sometimes described as Extended SNA Activities.
• Governments encouraged to measure its output through satellite
accounts.
• Volunteer work treated in same way as unpaid care work.
Mean time spent per day on activities by SNA
category, country and sex, for full sample population
1440
1240
1040
Minutes per day
840
640
440
240
40
-160
Non-productive
Argentina
M
India M
Korea M
Nicarag
M
S Africa
M
Tanzania
M
Argentina
F
India F
Korea F
Nicarag F
S Africa F
Tanzania
F
1019
972
1035
966
1116
1008
1003
906
1003
942
1052
961
Extended SNA
89
36
43
90
89
76
256
354
227
342
246
174
SNA
333
432
362
384
234
357
180
180
210
156
143
305
Why is Unpaid Work Excluded from SNA?
‘..inclusion in SNA is not simply a matter of estimating monetary
values for the outputs of [household production]. If values are
assigned to the outputs, values have also to be assigned to
the incomes generated by their production and to the
consumption of the output. It is clear that the economic
significance of these flows is very different from that of
monetary flows. For example, the incomes generated have
little relevance for the analysis of inflation or deflation or
other disequilibria within the economy. The inclusion of large
non-monetary flows can obscure what is happening on
markets and reduce the analytic usefulness of the data.’ UN
(2009) System of National Accounts 2008
Challenges to Reasons for Exclusion
• Substitution of unpaid for paid production of care services or
subsistence goods in the household sector could dampen
inflation, and even lead to deflation, as it would, other things
being equal, reduce market demand for goods and services.
• Ignoring this effect could lead to underestimation of the
downward multiplier following falls in output and
employment and overestimation of the prospects for speedy
recovery of the market economy following a downturn.
• Modeled by Erturk and Cagatay (1995) who argue that net
effect depends on whether depressive effect of more unpaid
work is outweighed by a stimulus to investment through an
added worker effect.
Unpaid Work and Growth of GDP
• Important driver of GDP growth in medium term is increased employment
of women. Unpaid work constrains women’s employment and hence
economic growth.
• In 2009, average female labour force participation rate in Latin America
and Caribbean was 52%, while the male labour force participation rate
was 80 %.
• In high income countries, the rates were 52% for women and 70% for
men.
• EU countries have explicit goal of increasing women’s employment rate
to support future economic growth.
• Women’s employment rates lag in EU countries in which women have to
spend more time taking care of children because of lack of good quality
affordable child care.
• Plunkett (2001) estimates somewhere around 1 million women could be
considered missing from the UK workplace due to lack of child care.
Public Provision of Child Care in Low and
Middle Income Countries
• Lack of adequate public provision of child care forces women in low
income households into low paying informal employment , such as homebased paid work, where children can be to some extent supervised while
mothers work- though this runs the risk that children will also be
incorporated into the work force.
• Elder daughters are also given the task of caring for younger siblings,
putting their education at risk.
• Provision of publically funded child care has increased maternal
employment rates in Colombia and Brazil( World Bank 2012).
• The World Bank has recommended increasing access to child care and
early childhood development programmes ( World Bank 2012).
Differences between unpaid work and
paid work
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Unpaid work is conducted within non-market relations.
It does not produce an income for those who do the work (such as cooking a
meal), rather it produces an income in kind for those who consume the services
(eating the meal).
Unpaid work is not done in return for pay, though there may be non-financial
rewards. It can have elements of:
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a gift (as in some volunteer work);
an obligation (to be a ‘good’ wife and mother requires a certain quantity and quality of unpaid work);
forced labour (as when the threat or reality of domestic violence is used to coerce women to
undertake unpaid work).
Those who specialize in unpaid work are at a disadvantage in a market economy :
women’s unpaid work obligations are a key reason for the persistence of the
gender wage gap, as is recognized by the World Bank in World Development
Report 2012.
Recognizing unpaid work does not entail advocating wages for house work.
It means designing policies to reduce and redistribute unpaid work.
Cuts to public expenditure
• Well-designed public expenditure:
Reduces unpaid work through provision of infrastructure and
services;
Redistributes unpaid work between women and men, for example
by well-planned parental leave subsidies.
• Poorly designed cuts in public expenditure reverse reduction
and redistribution
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Cuts to maintenance of water and sanitation
Cuts to food subsidies
Cuts to care services
Cuts to subsidies for father’s parental leave
 Negative feedback effects: women can not infinitely
extend their unpaid work .
Reliance on volunteers to run public
services
• Example: Budget of the municipality of Villa El Salvador in
Peru
• A food assistance programme that took up one third of the
municipal budget
• Relied on the unpaid work of women in the municipality to
distribute the food.
• If the municipality had had to pay for this time at the
minimum wage rate, the cost would have been equal to 20
per cent of the budget for this programme (Pearl 2002:39).
• Does this matter? Danger of ‘volunteer’ work being required
to access services- a user fee paid in time.
Increasing the efficiency of public services
• Example :measures to improve the ‘efficiency’ of public
hospitals (measured in terms of monetary costs per patient)
such as shortening the time that patient spend in hospital,
introducing more ‘day surgery’, lengthening the period of
convalescence at home.
• Cuts back on the financial costs of employing medical staff,
but increases the costs of households (and primarily women
within households) in time and energy spent on caring for
convalescing patients.
• A false economy: higher absenteeism and lower productivity
of unpaid carers in their own paid work.
Conclusions
Failure to take account of unpaid work in economic analysis and
policy can:
hamper economic recovery after a crisis,
reduce medium and long run growth prospects,
overburden women and increase rather than reduce gender gaps.
Lack of statistics on unpaid work hampers policy makers.
They fail to recognize unpaid work and do not take action to
reduce it and redistribute it.
Conduct regular time use surveys , construct satellite accounts
and build in procedures to take account of unpaid work in
economic policy making.