Radical
Statistics
Accounting for caring
Susan Himmelweit
It is good news that the Office for National Statistics is beginning the process of constructing a household satellite account for the UK (Murgatroyd and Neuberger, 1997). Such an account will record all household production, including services which are excluded from the UN System of National Accounts 1993 (SNA) to which the UK’s national accounts will conform from September 1998. The reasons given by the SNA 1993 manual for continuing to exclude household service production include the difficulty of imputing values for such non-marketed services and the lack of comparability of such imputed values with the market values used for measuring other forms of production. These problems of imputation and comparability amount to a good reason for collecting such statistics in a separate "satellite" account, allowing differences between the social relations of household and market production to be preserved and a variety of non-monetary as well as monetary measures to be used.
However, the SNA manual’s main reason for excluding household production from national accounts is much more questionable. It argues that the "production of services within households is a self-contained activity with limited repercussions on the rest of the economy". This, as feminists and others have shown, is simply not true. The amount of time and energy women in particular have put into household production has significant effects on the economy, both in terms of its results and because that time and energy is then not available to use elsewhere in the economy. Further, there is no reason to assume that household production bears any fixed simple relationship to what is going on in the rest of the economy. Published growth rates will exaggerate the growth of the whole economy, if the paid economy is growing through absorbing labour from household production, since production is simply being transferred from one sector to the other rather than increased overall. On the other hand, the two sectors may be growing together; increased monetary incomes can lead to greater scope for household production too.
Collecting statistics for household production and other unpaid activities is an important step in providing a picture of the economy that can be used for assessing the full impact of economic processes and policy. This is because the unpaid and paid economies are closely interdependent and neither can survive or flourish without appropriate inputs from the other.
In order to look at the whole picture we need to consider at least three sectors of the economy as in Figure 1, where the hidden economy of unpaid work that goes on within households and communities is made explicit. This unpaid economy revolves around the production of caring services, precisely those that the SNA would exclude but will be included in the satellite account. Caring services are of course also provided by workers employed in the public and voluntary sector and in the private sector – but they form a smaller proportion of the work done in these sectors and as paid work they would be counted in the SNA.[1]
TO SEE FIGURE 1 PLEASE CLICK HERE
Figure 1 shows the interdependence of the different sectors of the economy: the unpaid side of the economy, which consists of the household and community care sector, and the paid economy, containing both the public and voluntary sector and the private commodity-producing sector. While the dependence of the public sector on the wealth generating characteristics of the private sector is often noted, other interdependencies between the sectors are less frequently recognised. The unpaid care economy produces and maintains the labour force aided by inputs provided by the public and voluntary sector, for example, health and education services. These sectors also have a crucial joint role in developing the social fabric, the sense of community, civic responsibility and norms that maintain trust, goodwill and social order. Both these factors: – a healthy and educated labour force and a functioning social fabric – are essential to the private sector’s ability to generate wealth.
However, the unpaid care economy is not costless and itself needs maintenance and investment; both the public and private sectors of the paid economy provide consumption and investment goods and services to the unpaid care economy. Men and women work in all three sectors. However, there is a gender division of labour across them and it is largely women’s time that is stretched between the unpaid care economy and the various sectors of the paid economy.
This means that there is also a strong case to be made for disaggregating such statistics by gender. Systems of National Accounts, by ignoring household service production, record and measure the effects of what men do more accurately than women’s contributions to the economy. This systematically distorts the economic picture in cumulative ways. Assessing all contributions in terms appropriate to those made during the course of an economic life history typical of men will over-value these and systematically under-value and fail to support the contributions to economic life that women make.
The problem is not only one of insufficient detail, as it would be if men and women were randomly distributed across different economic positions. Because women and men lead systematically different economic lives, they face different constraints, assume different socially determined responsibilities and consequently make different economic choices. Disaggregation by gender will therefore throw up significant new patterns in the data corresponding to these systematic differences between men and women in their relation to the economy, with women typically assuming more household responsibilities and spending more of their time than men on unpaid work. National accounting systems that do not take account of the unpaid care economy make the transfer of labour from the care economy into employment appear costless, as though there was a reserve of women’s unused labour just waiting to be tapped – in economists’ terms as though women’s labour supply was infinitely elastic and their marginal product zero in the unpaid economy.
Growth rates in the paid economy are artificially inflated when labour is transferred from the caring to the paid economy (Cloud and Garrett, 1996). Such artificially inflated growth rates cannot be maintained for there is a limit to the reserves that can be called on from the care economy, and even long before that limit is reached the consequences for society may make further running down of the care economy unsustainable. The care economy also has less tangible products including, at the individual level, both psychological and educational outcomes, as well as the maintenance of the social fabric and norms of society. Ignoring the care economy encourages the view, which does not accurately reflect even men’s lives, that all time outside employment is a costless resource for economy policy to exploit.
Similarly, changes in the provision of care services by other sectors of the economy, for example in the public provision of community care, will have effects not only on the recipients of such care, but also on the availability for employment and need for financial support of those people who provide care within the unpaid economy. Care plays a vital role as an input to the rest of the economy. If insufficient time and resources are devoted to it, productivity will suffer as human resources deteriorate and the social fabric is inadequately maintained.
It is important to recognise differences between the paid and unpaid care economies that will affect the meaning of the data that is collected about them and its use in developing policy. First, the care economy runs largely on a different motivation for work; people generally care for others and perform unpaid work out of a sense of responsibility rather than for the direct rewards to themselves. This means that the care economy and people working within it do not necessarily respond in the same way to incentives and disincentives as they do in the paid economy. In particular, in the paid economy it can generally be assumed that raising wage rates will attract labour, increasing taxes will decrease incentives and so on. In the care economy, such effects may be very attenuated or may not occur at all. For example, a woman who feels that it is right that she care for her child herself may not respond much to increased material incentives to take employment. The quality of available childcare may be more the issue for her and she may "chose" poverty for herself and her children, rather than allow them to be inadequately cared for.
Second, because people apparently "choose" to care and the products of caring are so intangible and personal, even carers may not count caring as real work. Thus in time-budget studies mothers at home are more likely to record the time they spend at home as cooking and cleaning, rather than as the childcare which is taking place at the same time. This means that caring is likely to be systematically under-recorded even though it is likely to be the very reason that such mothers are at home in the first place.
Third, care is not just a quantitative issue but a qualitative one. In the unpaid care economy there is no clear work/leisure distinction as there is in nearly all paid employment. People do not clock off from their caring responsibilities even if they have a paid job as well. The long hours that people with caring responsibilities work may affect the quality of care they can give. We are accustomed to recognising the quality of care as an issue in social policy. However, it is also germane to economic policy because any consequences for the care economy which affect the quality of the labour force and the social fabric may in turn have significant effects on economic outcomes.
Fourth, unlike may other types of work, productivity increases in caring are unlikely to result in less time being required for it, although they may improve the quality of care. This is because personal relationships form the basis of care and these cannot be stretched across too many people and remain personal. This means that it is unlikely to be desirable to reduce the total amount of time devoted to caring labour in the economy, although there may be good reasons for shifts in which sector it takes place. The economy cannot, however, continue functioning if caring labour is squeezed in the unpaid economy without it being taken up elsewhere. Therefore we cannot in the long run expect continued productivity increases or savings of total time to result merely from shifts from the caring economy. Nor should this necessarily be the goal of economic policy; one of the benefits of economic growth and increasing productivity is to allow societies the choice of devoting more time to caring and other activities worthwhile in their own right. An important step in making that possible is the recognition of the contribution that unpaid caring makes to the economy. The publication of statistics on household production can only help in that process.
1. A full analysis should separate out the voluntary and public sectors because they operate under different social relations. However for the argument being made here, they can be treated together.
References
Cloud, Kathleen and Garrett, Nancy (1996), ‘A Modest Proposal for Inclusion of Women’s Household Production in Analysis of Structural Transformation’, Feminist Economics, 2(3), pp.93-120
Murgatroyd, Linda and Neuberger, Henry (1997), ‘A Household Satellite Account for the UK’, Economic Trends, pp.63-71
Susan Himmelweit
Open University, Walton Hall, Milton Keynes MK7 6AA
E-mail: s.f.himmelweit@open.ac.uk
