Unpaid Care and Economic Development

Nancy Folbre

IEG Distinguished Lecture 5

Institute of Economic Growth University Enclave, University of Delhi Delhi 110007, India Tel: 27667101/288/424; Fax: 27667410 Website: www.iegindia.org IEG Distinguished Lecture Series

1. Herring, Ronald: ‘Global Rifts Over Biotechnology: What Does India’s Bt Cotton Experience Tell Us?’ December 2009.

2. Basu, Kaushik: ‘Does Economic Theory Inform Government Policy?’ September 2010.

3. Elson, Diane: ‘Economic Crises and Unpaid Work in Low and Middle Income Countries: A Gender Analysis’ November 2010.

4. Uvalic, Milica: ‘Insights from a Transition Economy: The Case of Serbia’ January 2011.

© Institute of Economic Growth and Nancy Folbre

First published: November 2011

Institute of Economic Growth University Enclave, University of Delhi Delhi 110007, India Tel: 27667101/288/424; Fax: 27667410 Website: www.iegindia.org

Designed & Printed by Impress, New delhi IEG Distinguished Lecture 5

Unpaid Care and Economic Development

Na n c y fo l b r e Professor of Economics, University of Massachusetts at Amherst

November 2011 Institute of Economic Growth INSTITUTE OF ECONOMIC GROWTH Continuing Commitment to Excellence

The Institute of Economic Growth (IEG) is an autonomous, multi-disciplinary Centre for advanced research and training. Widely recognized as a Centre of excellence, it is one of India’s leading academic institutions in the fields of economic and social development. Founded in 1952 and established in 1958, its faculty of 30 social scientists (economists, demographers and sociologists) and a large body of supporting research staff focus on emerging and often cutting-edge areas of social and policy concern. Many past and current faculty members are internationally renowned and award-winning scholars.

IEG’s research falls into nine broad themes: Agriculture and rural development, environment and resource economics; globalization and trade; industry, labour and welfare; macro-economic policy and modeling; population and development; health policy; and social change and social structure. In addition, the Institute organizes regular training programmes for the trainee officers of the Indian Economic Service and occasional courses for officers of the Indian Statistical Service, NABARD, and university teachers. The Institute’s faculty members also supervise doctoral students from India and abroad, provide regular policy inputs, and engage with government, civil society and international organisations. Over the years IEG has hosted many renowned international scholars, including Nobel Laureates Elinor Ostrom and Amartya Sen, and others such as Ronald Dore, Yujiro Hayami, Jan Breman and Sir Nicolas Stern.

Founded by eminent economist V.K.R.V. Rao, IEG’s faculty, Board of Directors and Trustees have included a wide range of distinguished intellectuals and policy makers, including V.T. Krishnamachari, C.D. Deshmukh, P.N. Dhar, A.M. Khusro, Dharm Narain, C. Rangarajan, C.H. Hanumantha Rao, Nitin Desai, T.N. Madan, P.C. Joshi and Bimal Jalan. Several former faculty members have served as members of the Planning Commission or on the Prime Minister’s Panel of Economic Advisors. Prime Minister Manmohan Singh has had a long association with the Institute, initially as Chairman of the Board (1977–82) and since 1992 as President of the IEG Society. Nitin Desai is the current Chairman of the Board of Governors and Bina Agarwal is the Director of the IEG.

ii A NEW IEG LECTURE SERIES

This is the fifth paper in the ‘IEG Distinguished Lectures’ series. The series includes both named lectures, such as the V.T. Krishnamachari Memorial Lecture and the Dharm Narain Memorial Lecture, which are held periodically, as well as invited lectures by distinguished intellectuals under the broad theme: Distinguished Lectures in Economy, Polity and Society.

Nancy Folbre’s original and insightful paper is based on the distinguished lecture she delivered at an event organized by the IEG on 16 December 2009. This was followed by an international seminar on ‘The Challenge of Gendering Economics’. In this paper, Folbre focuses on an issue that has received little attention from mainstream economists, namely that of unpaid care work undertaken within the home mainly by women, such as caring for children, the elderly, the ill and the disabled. What are the implications of such work for living standards, gender inequality, and economic development? Does such work increase or decrease as a country develops and incomes rise? The answer, as Folbre argues, is far from straightforward since life expectancy increases alongside thus raising the burden of elder care. The paper also discusses in depth the conceptual and methodological difficulties in the measurement and valuation of unpaid care work.

Bina Agarwal, Director IEG November 2011

iii Na n c y fo l b r e Nancy Folbre is professor of economics at the University of Massachusetts at Amherst and a staff economist with the Center for Popular Economics. Her academic research explores the interface between feminist theory and political economy. Among her extensive publications are many academic articles and books, including Greed, Lust, and Gender: A History of Economic Ideas (Oxford 2009), Valuing Children: Rethinking the Economics of the Family (Harvard 2009), Who Pays for the Kids? Gender and the Structures of Constraint (Routledge 1994) and Family Time:The Social Organization of Care (edited with Michael Bittman, Routledge 2004). Her books for a wider audience include: Field Guide to the U.S. Economy (with J. Heintz and J. Teller-Elsberg, New Press 2006) and The Invisible Heart: Economics and Family Values (New Press 2001). She is also an associate editor of the journal, Feminist Economics. In her latest book, Greed, Lust and Gender, Folbre explores her longstanding interest in the philosophical underpinnings of economics as a discipline. She has also long been researching the family and non-market work, ‘measuring the time that parents put into children and asking what you would have to pay for it if it were withdrawn’. She describes another popular publication, The War on the Poor: A Defense Manual (1996), as a user-friendly resource ‘to help people understand the numbers and overcome their antipathy towards economic analysis’. Nancy Folbre co-chaired the John T. and Catherine D. MacArthur Foundation Research Network on the Family and the Economy and also received the Foundation’s five-year fellowship (popularly termed the ‘genius award’). She currently coordinates a working group on care (Russell Sage Foundation), writes a regular blog for the New York Times: Economix Blog at http://economix.blogs.nytimes.com/author/ nancy-folbre/ and has a personal website, http://people.umass.edu/folbre/folbre/. iv Unpaid Care and Economic Development1

Na n c y Fo l b r e

Abstract

This paper examines aspects of unpaid care work that are particularly relevant to economic development. It discusses conceptual and methodological problems which arise in the measurement and valuation of unpaid care work and the implications of such work for living standards, gender inequality, and economic development.

Key words: Child Care, Non-Labor Market Discrimination, Economics of Gender, Demand and Supply of Labor JEL codes: J13, J14, J16 and J2.

1. Introduction

Mainstream development economists continue to define economic growth in terms of conventional measures such as market employment and income per capita. However, a new paradigm of research, informed by feminist theory, emphasizes the need for empirical analysis of time devoted to non-market household work, especially direct care of children, individuals suffering illness or disability, and the frail elderly.

1 This discussion paper, prepared for the Institute for Economic Growth, University of Delhi, represents an effort to consolidate and build on my previous research on care work and economic development, with the aim of moving toward completion of a book on this topic. It draws heavily from papers published by UNRISD (Folbre and Yoon 2008), the Journal of Human Development (Folbre 2006), The Handbook of Economic Inequality (Folbre 2008a) and Social Indicators (Folbre 2008b), my participation in the National Academy of Science project ‘Beyond the Market’ and the Commission on the Measurement of Economic and Social Progress, convened by President Sarkozy of France and chaired by Joseph Stiglitz and Amartya Sen. It was also shaped by conversations with Bina Agarwal and Indira Hirway during my visit to the Institute for Economic Growth, Delhi, December 2009. 2 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 3

The impact of unpaid work on household living standards can be treated either as a form of implicit income (an addition to household market income), or an increase in household consumption (an addition to market purchases). The economic relevance of such contributions was argued as early as the nineteenth century (Folbre 1991). Gary Becker (1965), Reuben Gronau (1973) and other neoclassical economic theorists have emphasized its theoretical importance. Within the Marxian literature, the so-called ‘domestic labor’ debates revolved around this topic (Seccombe 1974, Harrison 1973).

Additional motivation for sustained attention to unpaid care emerges from feminist critiques of the ‘universal breadwinner’ model that urges women to change their work to more closely resemble that of men (Fraser 1996). While women have been disempowered by their traditional specialization in care work—both within the family and without—care work provides important resources for the development of human capabilities. Responsibilities for the care and nurturance of dependents impose significant financial and temporal constraints. Women may be reluctant to pursue gender equality if they fear for the wellbeing of children and other dependents. Alternatively, women may seek to minimize the burden of care responsibilities by remaining childless, a growing trend in many countries such as Italy, Spain, and South Korea with fertility rates well below replacement levels. Rapid fertility decline, however, leads to increases in the relative share of the elderly in the population, a trend which also increases the demand for unpaid paid.

Many experts advocate policies that will encourage men to participate more actively in family care and also provide more public support for such work (Perrons 2000, Gornick and Meyers 2003). Rather than merely encouraging increased paid employment of women, policies could encourage both women and men to combine paid work with family care. Support for such policies can be increased by development of a more detailed picture of the economic consequences of unpaid care, which 2 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 3

imposes costs in the form of financial obligations, lost opportunities, and foregone wages but also generates intrinsic rewards, stronger family and social ties, and high quality services for dependents.

This paper examines aspects of unpaid care work particularly relevant to economic development, discussing: (i) conceptual and methodological problems regarding measurement of unpaid care work; (ii) conceptual and methodological problems regarding valuation of unpaid care work; (iii) the implications of unpaid care work for living standards and gender inequality; (iv) the relationship between unpaid care and economic development. The final section briefly summarizes an ambitious research agenda on the relationship between unpaid care and development.

2. Conceptualization and Measurement of Unpaid Care Work

Unpaid care is a subset of a larger set of care activities whose contribution to economic development has generally been underappreciated. Unpaid care is a particular form of unpaid work, distinct from both paid care work and other forms of non-market work (see Box 1). It is typically defined in terms that allow measurement through analysis of time-use survey data. These data suffer from some limitations that are particularly relevant to an understanding of changes in the course of economic development.

2.1. The distinctive contributions of care

Labor is the most important input into care but it is by no means the only one. Labor is typically combined with raw materials and with physical, environmental, social and human capital to provide care services. The functional relationships among these inputs are difficult to specify, but it seems likely that there are important synergies among them, similar to what environmental economists call ‘cook pot effects’. Care is more ‘personal’ than other service activities, and is less likely to enjoy economies of scale than other economic activities. 4 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 5

Box 1. Defining work

Wage work: Performed in return for a wage. Some forms of wage work represent paid care work—such as health care provision, teaching, and other activities where concern for the well-being of the care recipient is likely to affect the quality of the service provided.

Self employment work: Performed in hope of remuneration. Can be part of the formal sector or the informal sector. Like wage work, self employment work can fit the category of paid care work.

Unpaid work: Not directly remunerated. Sometimes involves production for the market (e.g. unpaid family workers).

Non-market work: Production of goods and services not sold in the market, including subsistence agriculture, or production of food for own consumption.

System of National Accounts (SNA) work: Includes some forms of production for use such as collection of water and wood.

Unpaid care work (also called household work, domestic labor, or family work): Provision of services for family and community members outside of the market, where concern for the well-being of the care recipients is likely to affect the quality of the service provided.

Most workers make important direct or indirect contributions to their care economy, and their relative importance tends to vary along with levels of economic development. One reason that time-use surveys may reveal relatively little time devoted to unpaid direct care activities in low-income countries is that the demands of subsistence production in those countries are great, and this form of production is more easily combined with care of dependents. The relative size of the informal sector, particularly the availability of paid domestic servants, affects the 4 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 5

burden of unpaid work, as does the proportion of the paid labor force involved in provision of child care, education, and elder care services.

The quality of direct care work is difficult to monitor or to specify in an explicit contract. As a result, social norms and personal preferences have an important impact on the quality of care. Care providers who feel genuine affection and concern for those in their care are likely to do a better job, all else equal, than those lacking personal connection. It follows that long term personal relationships, or, in the context of purchased services of child care and elder care, low rates of turnover, are likely to increase quality (Folbre and England 2003). Both producers and consumers of care share a common interest in the quality of care (Folbre 2006). Finally, care services have an important public good component, because they improve productive human capabilities. The benefits of providing good care, ‘spill over’ to improve the wellbeing of the community as a whole.

2.2. Defining care work

Care work is a crucial dimension of the process of social reproduction: the process of making it possible for individuals, families, and society itself to continue. But social reproduction is very general rubric. It is difficult to think of any activities that are not a part of it. All forms of work contribute to social reproduction: Even a single male wage earner producing steel ingots earns a wage that helps him reproduce his own labor power.

Most people visualize ‘care work’ as work done, primarily by women, to care for family members: cooking, cleaning, and shopping, as well as care of children, the sick, and the elderly. Some scholars define care work (or subcategories of care work) more specifically, focusing on the labor process, rather than relationship to the site of production (home vs. market). A process-based definition calls attention to activities that involve close personal or emotional interaction (Badgett and Folbre 1999, 6 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 7

England and Folbre 1999). Many of women’s family responsibilities, such as child care and elder care, fall into this category. Care work can also be conceptualized in terms of who benefits. Work directed toward meeting the needs of children, the elderly, and the sick and disabled is particularly important, because these ‘consumers’ often lack political voice. Yet much care time is also devoted to meeting the needs of healthy adults.

These concepts of care work clearly encompass work within the paid economy, particularly jobs that provide market substitutes for services women once provided in the home. In developed countries, many women are employed in ‘care occupations’ such as child care, elder care, nursing, and teaching. Such occupations tend to pay less than other jobs with otherwise similar characteristics (Budig et al. 2002, Folbre et al. 2011). Women’s segregation in caring jobs helps explain the persistence of gender differences in pay.

Unpaid care work represents a subset of all paid work, and is not perfectly synonymous with ‘non-market work’ or work that does not yield a direct monetary reward. Many censuses and labor force surveys in developing countries enumerate ‘unpaid family workers’ who contribute to a family farm or enterprise without receiving direct payment. Many of these workers are engaging in activities that are indistinguishable in most respects from paid employment. United Nations System of National Accounting (SNA) considers some forms of ‘non-market’ work within the ‘production boundary’, and recommends inclusion of estimates of their value within national income accounts—primarily production of food for own consumption, but also gathering of fuel wood and collection of water. These activities are generally not considered forms of unpaid care.

One activity that seems to fit the SNA criteria but is largely ignored within national income accounts is breastfeeding. This is a time and energy- intensive activity that is a quintessential example of food production 6 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 7

for ‘own use’. If mothers do not breastfeed, they must purchase market substitutes such as infant formula to feed their children.

The informal sector, comprised of self-employed individuals, small businesses, and temporary or contingent workers, often straddles the boundary between paid and unpaid activities, as when women street merchants tend their children (including breastfeeding them) even as they sell their wares. Caring for other people’s children, or other family dependents (whether sick or elderly) often represents a form of informal reciprocity that is repaid in kind.

In sum, care work is ‘located’ in many different areas of the economy— ranging from the family to paid employment, and is performed on behalf of a wide range of care recipients, as summarized in Table 1. Wherever it takes place, we can distinguish between ‘interactive’ care activities that involve face-to-face or hands-on interaction, and ‘support care’ that provides the infrastructure in which interactive care takes place.

In the remainder of this paper, I focus on the first row—unpaid care that takes place outside the System of National Accounts. Many papers commissioned by UNRISD use the term ‘unpaid care work’ to refer to all unpaid work in the home and community (Razavi 2007, Budlender 2008b). In this paper, I adopt this definition, but make a distinction between ‘interactive’ care work that involves face-to-face or personal interaction, and ‘support’ care work that provides necessary inputs into this process.

This distinction matters because interactive and support care work differ in their degree of substitutability among care providers. In direct care work, concern for the well-being of the care recipient—and the nature of personal relationships—is likely to affect the quality of the services provided (as in tending to a small child, or an elderly person with dementia). Support care work does not necessarily entail personal interaction (as in preparing meals or doing laundry for family members) 8 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 9

(Folbre, forthcoming). I also emphasize the importance of examining forms of care that cannot be described in terms of ‘activities’, especially supervisory care that constrains the time, attention, or availability of a caregiver. Table 1: Categories and examples of care work activities

Children Elderly Sick, Disabled Adults (other Self than self) Unpaid Interac- Changing Spoon feed- Spoon feeding Counseling Visiting doc- Care tive Care diapers ing or bathing or bathing tor, exercis- Work ing (outside Support Preparing Preparing Preparing Preparing food, Preparing SNA) Care food, doing food, do- food, do- doing laundry, food, doing laundry, clean- ing laundry, ing laundry, cleaning laundry, ing cleaning cleaning cleaning Unpaid Interac- Breastfeeding Subsis- tive Care tence Produc- Support Growing Growing Growing Growing food Growing tion Care food for own food for own food for own for own con- food for own (inside consumption, consumption, consumption, sumption, col- consump- SNA) collecting collecting collecting lecting wood or tion, collect- wood or carry- wood or car- wood or car- carrying water ing wood ing water rying water rying water or carrying water Informal Interac- Family day Family day Informal but Market tive Care care; baby care; elder paid assis- Work sitting -sitting tance to in the home. Support Domestic Domestic ser- Domestic ser- Domestic Care servant; paid vant; Paid or vant; Paid or servant; Paid or or unpaid fam- unpaid family unpaid fam- unpaid family ily worker in worker ins- ily worker in worker in small small service mall service small service service enter- enterprise enterprise enterprise prise Paid Interac- Child care Elder care Nurse, nursing Counselor, Employ- tive Care worker, worker, ger- aide, doctor nutritionist, yoga ment teacher pedia- ontologist instructor trician Support School ad- Nursing Hospital Most paid jobs Care ministrator, home Ad- administrator, not listed in clerical, food ministrator, Clerical, food other cells. services or clerical, food services or janitorial services or janitorial janitorial 8 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 9

2.3. From conceptualization to measurement

The primary tool for measurement of unpaid work is the diary-based time-use survey, a supplement to the household surveys that have been routinely used by national statistical agencies to collect information on household living standards. In the past ten years, the number of time-use surveys conducted in developing countries has mushroomed, and now provides an impressive body of data ( For a summary of time use surveys in the South, see Esquivel et al. 2008). For the most part these surveys rely on similar classification of time-use activities, and apply a simple criterion to distinguish activities deemed ‘work’ from activities deemed to be ‘leisure’, known as the Third Person Criterion. One person provides services for another; if a third person could, in principle, be legally hired to provide such services, the service is considered work.

This criterion provides a simple and effective way of categorizing activities such as child care and tending to a sick or elderly person (interactive care) and cooking and cleaning (support care) as ‘work’. In general, it is difficult to perform leisure for you—at least, if you do, it defeats the purpose of leisure. The boundaries between work and leisure remain slightly fuzzy. For instance, sexual activities are generally considered leisure, though someone else can in principle be paid to perform them. Also, studying is an activity that many would consider work, but no one else can be paid to perform it on your behalf. Some would also put health-maintenance activities, such as a special exercise regimen, in this category.

The category of ‘self-care’ also deserves attention. Activities such as eating, drinking, bathing, and grooming are socially necessary. People who cannot feed themselves or engage in other activities of daily living are considered disabled and require the assistance of another person. Bathing and grooming represent services that can often be purchased in the market. Indeed, in many developed countries, the amount of money 10 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 11 devoted to hair care and manicures is substantial. While these purchases represent luxuries, so too do many other commodities purchased in the market, including food prepared away from home. The process of economic development often leads to increases in the percentage of persons living alone and thereby expands the relative importance of self-care. Cooking a meal for oneself is defined as unpaid work. Why shouldn’t washing and setting one’s hair also be included? When such personal services are purchased in the market economy, they are counted as a contribution to Gross Domestic Product.

While these definitional issues deserve further consideration, they should not stand in the way of consistent categorization and measurement of forms of unpaid work, which generally fall into the category of either interactive or support care. The third-person criterion is widely accepted by time-use scholars. Its relevance is clearly substantiated by analysis of the changing structure of paid employment in the process of economic development: the expansion of female employment that typically accompanies the expansion of the paid service sector often takes the form of care occupations (Folbre, forthcoming).

It is important to note that the third-person criterion represents a very different approach to the definition of ‘work’ than neoclassical economic theory, which treats work as activity conducted only in order to receive income or other benefits, and a source of ‘disutility’. In other words, work is something you do to get money (or goods and services that you would otherwise have to pay for), not something you get any pleasure from. As many time-use researchers have observed, people report gaining considerable satisfaction (or ‘process benefits’) from paid employment, as well as from unpaid work (Juster and Stafford 1985). Further, there is no easy way of determining whether individuals are enjoying an activity or not. Therefore, it is inconsistent to disqualify unpaid work activities, such as child care as work, on the grounds that the caregiver derives some pleasure or satisfaction from the activity. 10 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 11

At the same time, further research on the subjective experience of work (whether paid or unpaid) is important and efforts to develop instruments that can be used in conjunction with time-use surveys are well underway (Kahneman et al. 2004). Furthermore, analysis of the impact of wages and income on time devoted to distinct activities can reveal important differences among activities. Econometric analysis of the effects of wages and income on time devoted to child care reveals a different pattern than effects on domestic work or leisure. In the U.S., higher wages and education seem to exert a positive effect on direct care time (Kimmel and Connelly 2007). In Europe, higher wages seem to have little significant effect (Hallberg and Klevmarken 2003, Kalenkoski et al. 2005). Both results suggest that child care time has some of the characteristics of a luxury good, the demand for which rises steeply with income.

2.4. Care activities vs. care responsibilities

Most national time-use surveys collect data only on specific activities. The ‘primary activity’ is designated in response to the question ‘what were you doing?’ The ‘secondary activity’ is designated (by some surveys) as a response to the question ‘what else were you doing at the same time?’ But child care is not merely an activity—it is also a responsibility that constrains adult allocation of time even when no direct care activity is being performed (Budig and Folbre 2004). Many paid jobs, ranging from the dramatic task of firemen to the mundane task of sales, pay workers ‘to be available’ whether or not they are actively engaged in activities (such as fighting fires or interacting with customers). This limitation of conventional time-use surveys raises a problem of construct validity—‘the extent to which an observed measure reflects the underlying theoretical construct that the investigator has intended to measure’ (Andrews 1989: 393). Michael Bittman offers a particularly poignant example that emerged from a focus-group discussion with Australian respondents providing care for a sick or disabled family member: a mother who used a vacuum aspirator to suction mucus out of her daughter’s throat on a regular basis. The care activity itself required only about 5 minutes out 12 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 13 of every hour. The responsibility to provide this care, however, made it virtually impossible for the mother to perform any activities outside the home, even shopping (Bittman, personal communication).

Most discussion of problems with care measurement focuses on the more mundane, though also significant problem of measuring secondary activities, those conducted simultaneously with primary activities. For instance, a mother might report that her primary activity is cooking dinner, but her secondary activity is talking with her children while she does so. As was observed in one of the first published cross-national comparisons of child care time, much child care takes the form of secondary activities, measurement of which is highly susceptible to differences in survey wording and administration (Stone 1972). Duncan Ironmonger argues that primary activity measures may capture no more than about 25 per cent of time devoted to children (Ironmonger 2003, 2004).

But the measurement of child care as a secondary activity seems to be successful only if, as in the Australian case, supervisory care or ‘looking after children’ is included on the activity list. National surveys are inconsistent on this issue. Yoon (2005) describes resulting problems with interpretation of Korean time use data. Budlender (2008b) and Charmes (2006: 58) observe a number of difficulties with time use surveys in other developing countries. Budlender notes that questions on secondary and simultaneous activities in the Nicaraguan time use survey were so poorly answered that they were not included in official analysis (Budlender 2008b: 6).

A recent U. N. report emphasizes that if estimates of time-use are based only on primary activities, many care activities will be underestimated (UN 2005: 35). However, there has been little specific assessment of the specific features of individual surveys that may lead to problems in this area. The Australian Time Use Surveys of 1992 and 1997 registered large amounts of secondary care for two reasons. First, they 12 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 13

included an explicitly coded activity that called attention to supervisory responsibilities:

541 Minding children. Caring for children without the active involvement shown in the codes above. Includes monitoring children playing outside or sleeping, preserving a safe environment, being an adult presence for children to turn to in need, supervising games or swimming activities including swimming lessons. Passive child care.

Second, they gave written instructions to respondents regarding secondary activities, listing childminding as an example. As a result, these surveys recorded three hours of secondary child care for every single hour of child care as a primary activity. The United Kingdom survey of 2000, which lacked both these features, registered much lower levels of secondary relative to primary care (Folbre and Yoon 2005).

Differences are even greater in non-English speaking countries. For instance, in her analysis of the 2004 Korean Time Use Survey, Yoon finds that among married women with at least one child under the age of five in their household, secondary child care time averaged less than one- tenth of an hour per day, compared to about 3.2 hours of primary child care time. She argues that this finding probably reflects the absence of an activity code describing anything resembling passive or supervisory care (Yoon 2005). Similar definitional problems may help explain why the recent Indian time use survey suggests that less time is devoted to supervising children than to the activities of direct care (see ESCAP 2003: 191).

The new draft International Classification of Activities for Time-Use Statistics does include a category for minding children, parenthetically described as passive care (UN 2005: 322). But it is noteworthy that two affluent countries, the Canada and the U.S., both rely on a measure 14 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 15 of child care that is not purely activity-based. Their most recent time use surveys acknowledge the diffuse nature of child care by including a special child care module designed to ascertain if individuals were ‘looking after children’ (the Canadian wording) or if ‘children were in their care’ (the U.S. wording). Answers to these questions are typically reported as ‘secondary’ child care activity (Fedick et al. 2005; ATUS published tables). Yet in the U.S. case, the wording was explicitly designed to capture something broader than a mere ‘activity’. As the term ‘in your care’ implies, it was designed to capture supervisory responsibility (Horrigan and Herz 2004).

The U.S. survey shows that the time that adults reported children ‘in their care’ is more than three times greater than the time reported engaging in an ‘activity’ with children (Folbre and Yoon 2005). Studies using Australian time use data suggest that time devoted to the care of sick and disabled persons is also seriously understated by activity- based measures (Bittman et al. 2004). Personal communications from public health experts studying the impact of HIV/AIDS on time use report similar problems (Tony Barnett, at Levy Conference, October 2005). This evidence suggests that activity-based surveys should be supplemented by more stylized questions regarding care responsibilities. (Note: in this respect the ‘stylized question’ approach to unpaid work in general recently applied in Nepal may actually be superior to a time diary based survey) (ESCAP 2003: 31). Advocates of increased gender- sensitivity in data collection have long advocated for more small-scale, qualitative, ethnographic research that could help calibrate quantitative results (Corner 2002).

An alternative approach lies in reliance on more stylized measures, such as those employed by both the U.S. and Canadian time use surveys, asking respondents specifically to consider during which activities they had children ‘in their care’ (the U.S. wording) or ‘looking after children’ (the Canadian wording). While this is a promising approach, results seem 14 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 15

sensitive to small differences in wording, limiting both international and longitudinal comparability (Folbre and Yoon 2007a, Allard et al. 2007).

Wherever possible, survey design and survey analysis should aspire to a detailed and disaggregated analysis of responsibilities for the care of children or adults into supervisory care, support care (household activities or household management on behalf of care recipients) and direct interactive care of different types, as indicated in Box 2 below. These activities reflect different levels of work intensity and skill.

Box 2. The care continuum

Supervisory Care Support Care Interactive Care: Interactive Care: Physical Care and Developmental Transportation and Educational Care Oversight or ‘on Housework Feeding, bathing, Reading aloud, call’ responsibilities or household dressing, holding, instructing, playing for young children, management providing medical with, engaging the sick, or frail time on behalf of care, transporting in conversation elderly (sometimes care recipients child or other care with child. termed ‘passive (assigned on an recipient care’) approximate per capita basis).

Disaggregation of care into these distinct components, including supervisory care, which represents more of a constraint on time allocation than a distinct ‘activity’, yields significantly higher estimates of time devoted to child care than measures based on specific child-care activities alone. Table 2, based on analysis of data from the American Time Use Survey in 2003 for adults living in households with at least one child 12 or under (but no older child), illustrates the significant differences in magnitude at stake: Women devoted approximately 8.8 hours per day to either supervisory, support, or developmental care activities, but only 2.3 16 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 17 hours per day to the activities of interactive care that are conventionally coded as ‘child care’. Similar differences were apparent for men.

Table 2: Average adult time devoted to children in the U.S., 2003

Men Women Supervisory Care (excluding time while children asleep at night) 4.0 5.1 Support Care .6 1.5 Child-related housework--no simultaneous supervisory care) .2 1.1 Child-related housework—simultaneous with supervisory care .1 .3 Child-related household management-no simultaneous supervisory care .2 .3 Child-related household management—simultaneous with supervisory care .1 .1 Interactive Care .9 2.3 Physical Care .4 1.3 Developmental Care .5 1.0 Total Time Devoted to Child Care 5.5 8.8

Source: Folbre and Yoon, 2007b. Note : Average adult time is the average hours per day for adults living in a household with at least 1 child of 12 years, or under, and one older.

2.5. Intensity and density of care

Additional problems arise from lack of consideration of the intensity or density of child care efforts. On the one hand, unpaid work may be conducted at a more leisurely pace or in conjunction with other more pleasurable activities than paid work. On the other hand, pressure to complete unpaid care tasks in the time available may lead to high levels of multi-tasking, as reflected in reports of participation in what are called secondary activities. Multitasking often increases work intensity. For instance, a mother watching a small child may be preparing dinner at the same time. Evidence suggests that multi-tasking is widespread in unpaid work, particularly among women (Floro 1995).

A related issue concerns care density, or the ratio of care providers to recipients. An adult who reports spending an hour of time engaged in child care may be the only person in charge of three children or one of three adults engaged in caring for one child. An input-oriented adult- 16 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 17

centric survey that simply tallies hours supplied would show the same result in either case: one hour of care time supplied. But a survey of the care received—based on a child-centric survey such as the Child Development Survey of the Panel of Income Dynamics—will show three hours of child care consumed in the first case and only one in the second.

Like other household public goods, care is not perfectly rivalrous in consumption. In other words, when one adult cares for two children, the care each receives is surely more than half what they would receive if cared for alone. Yet care quality is almost certainly diluted as the ratio of children to adults increases, and economies of scale—improvements in efficiency achieved by caring for more than one child at atime— are limited. Many time-use surveys, including the ATUS and the Child Development Supplement of the Panel Study of Income Dynamics, include questions about who else was present that make it possible to calculate the ratio of adults to children, also known as the density of care (Folbre et al. 2005). The implications of density, however, are difficult for economists to interpret.2 Developmental psychologists need to tell us more about the effects of the ratio of care providers to recipients on the value of care, in both unpaid and paid care.

Similar problems apply to measure of other forms of unpaid care. Many time-use surveys fail to distinguish between time caring for elderly adults who are ill and those who are disabled (Budlender 2007: 10). It is often difficult to ascertain the ratio of caregivers to care recipients. Further, care for adult dependents is distributed far more unevenly throughout the year—and throughout the population than child care. As a result, time-use surveys conducted on a single day or week seldom yield a sufficiently large number of cases to provide the basis for statistical analysis.

2 A non-linear transformation of the density of care, such as the square root of the child- adult ratio, could provide a reasonable way of weighting inputs of time, paralleling the economies-of-scale parameters applied in household equivalence scales. But the relationship between density and care inputs probably varies with social context and age of children. 18 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 19

Careful analysis of specific care activities within individual surveys can yield useful results (e.g. see Budlender’s analysis of South Africa, 2008a). But these measurement problems seriously constrain cross- country comparisons. Interactive care activities may simply become more visible in the course of economic development because they take a more concentrated form. For instance, in a less-developed country a mother may perform domestic work or engage in work on a family farm or enterprise while overseeing her children’s play, reporting very little time in direct care. In a more-developed country, a mother engaged in wage employment who has been away from her children all day may instead sit down with them for an hour at bedtime and read aloud to them, a more easily-measured care activity.

Similarly, in a less-developed country a family caregiver may engage in a combination of market and non-market work in the same room as a bed-ridden dependent, providing company and supervision at little additional temporal cost. In a more-developed country, a family caregiver may make an explicit trip to a hospital or nursing home for an explicit visit precisely because the spatial separation requires a different concentration of emotional care. More extensive qualitative and ethnographic research based on direct observation of care provision may be a prerequisite for improvements in survey design. At the same time, analysis of existing survey data can help raise questions and concerns that could inform the design of observational studies.

3. Valuation of Unpaid Care

Conventional measures of growth in Gross Domestic Product (GDP) offer a biased and incomplete measure of improvements in material living standards. Leaving aside issues of subjective welfare (whether measured as reported ‘happiness’ or in other terms), unpaid work that is currently considered external to the ‘production boundary’ of the System of National Accounts clearly contributes to objective measures of welfare, such as the consumption of goods and services, health, and social/family 18 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 19

insurance based on sharing and reciprocity. When time is reallocated from unpaid to paid activities, the impact of possible reductions in the value of unpaid work is overlooked. For this reason, GDP growth can overstate real growth in consumption. On the other hand, improvements in household technology can yield increases in productivity of unpaid work (Folbre and Wagman 1993, Wagman and Folbre 1996). For this reason, GDP growth can also understate real growth in consumption. Another important empirical issue concerns substitutability of paid and unpaid services, an issue that should include consideration of their spillover effects. For instance, a home-produced meal and a purchased meal may be substitutes in terms of food consumption, but have very different impacts on the development of personal and social relationships. Similarly, a purchased video game may provide entertainment similar in respects to playing charades with a group of friends, but have very different implications for ‘social capital’.

A stand-alone system of ‘time accounts’ with no monetary estimates attached would represent an important contribution to our understanding of economic development. But valuation of care time is indispensable to any overall measure of gendered responsibility for the care of dependents. Overall, men tend to devote more money, women more direct care time, to the support of dependents. Without some common denominator between these two, comparisons of overall contributions cannot be made. If we treat the market economy and work outside the market as two entirely separate and incommensurable spheres it is difficult to conceptualize any interaction between the two.

Estimates of time use can be valued in monetary terms by reference to some market equivalent, such as an hourly wage rate. No method of valuation is perfect, and the limitations of all methods must be acknowledged. Still, the assumptions used to impute a value to non- market work are no more far-fetched than those often applied to other components of the national income accounts, and recent research yields 20 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 21 many plausible estimates. Furthermore, there is considerable scope to expand methods of valuation to consider both the intrinsic and productive value of human capabilities.

Labor hours can vary in terms of intensity, skill, quality, and productivity, and differences in wages and prices can capture at least part of this variation. Estimates of the dollar value of work also make it possible to assess the relative importance of labor costs relative to other costs of providing care. The costs of raising children, for instance, are far greater when the cost of the labor required, as well as the costs of food, clothing, and shelter, are taken into account (Folbre 2009).

3.1. Theoretical and methodological dilemmas

Efforts to impute a value to non-market work are based on strong—and not necessarily accurate—assumptions regarding market equivalents, and careful analysis of these assumptions is needed in order to interpret those estimates. In particular, it is important to emphasize from the outset that many the interactive care of dependents has distinctive characteristics:

●● Process benefits received by the care provider, such as intrinsic satisfaction or pleasure from increasing the well-being of the care recipient, are particularly important.

●● Care recipients typically enjoy increased well-being, but are often unable to pay for (or ‘pay back’) for these services.

●● Care services often represent an investment in the development of human capabilities, contributing the both human capital and social capital. Valuation of an investment good, unlike a consumption good, requires calculation of a flow of costs and benefits over time.

●● Care generates externalities, or spillover effects which can be characterized as public benefits (or costs). 20 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 21

Efforts to assign a monetary value to non-market work have intensified in recent years, with particular attention to the care of dependents. A recent National Research Council report entitled Beyond the Market calls for major revisions to the U.S. national income accounts and highlights the role of family work in the creation of human capital (Abraham and Mackie 2005). President Sarkozy of France appointed an international Commission on the Measurement of Economic Performance and Social Progress (2009) that also called for valuation of unpaid work performed on behalf of family, friends, and community members.

Standard approaches to the valuation of unpaid work typically emphasize the logic of individual choice, assuming that individuals know what they want and how best to get it. This assumption often does not hold for care work (Folbre et al. 2011). Still, it provides a framework for gaining at least some empirical traction. In deciding whether to provide a service or to purchase it, rational individuals should consider both the replacement cost of their time (the cost of purchasing the service) and the opportunity cost (the benefits they forego by devoting time to providing the service). If the opportunity cost is lower than the replacement cost, a rational individual would choose to provide the service directly rather than to purchase it if money were the only relevant consideration, so wages are often used as an estimate of opportunity cost.

However, care work often entails non-pecuniary costs and benefits, and rational individuals compare the utility or happiness they will gain from alternative activities, as well as the pecuniary costs and benefits, when calculating opportunity costs.3 As a result, opportunity cost is a distinctly individual measure, and it reflects only the valuation the caregiver places on her or her time, not its value to the care recipient or to society at large. For instance, a lawyer who takes a day off work to care for a sick child faces a much higher opportunity cost than a clerical assistant in terms of

3 In this sense, calculations made on the basis of opportunity cost include a measure of what economists call ‘consumer surplus’. 22 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 23 foregone earnings per hour. However, the benefits may be the same from the child’s point of view, since the lawyer is not necessarily any better at making soup, taking a temperature, administering aspirin, reading aloud, or sitting by the child’s bedside.

Many decisions to provide care are based on altruistic preferences, but some individuals are more altruistic than others and women often feel greater obligations toward family members than men do. The value individuals place on their time may differ from the assessments of other family members. Parents may not invest enough in their children’s education to maximize their children’s earnings unless they are ‘rich enough and altruistic enough’ (Behrman et al. 1995). Similarly, their decisions about how to provide child care are influenced by their own preferences and constraints, not purely by considering what is best for the children.

Many factors make it difficult for people to assess the consequences of their decisions. Non-custodial parents, for instance, may fear that their contributions to care may crowd out those of custodial parents (Weiss and Willis 1985). The risk of divorce or some other form of disruption of implicit family contracts can also make it difficult to judge potential risks and rewards. For instance, a married woman might be more willing to leave paid employment to care for an infant child if she were confident that her marriage would remain secure or that her husband would later take a turn at staying home with the children, allowing her to focus on her career. Similarly, a daughter might be more willing to leave paid employment to care for an elderly parent if she were confident that a bequest would help defray her losses of income, or that her siblings would help her out. In both cases, uncertainty about opportunity costs might discourage family members from making commitments to provide unpaid care (Lundberg and Pollak 2003).

But while individuals may find it difficult to accurately estimate opportunity costs, they can use their expected hourly wage rate to Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 23 approximate what they give up when they reallocate time to unpaid work. Researchers can go further, moving beyond reliance on a simple measure of expected hourly wage rates to compare the lifetime income of individuals who provide care with that of those who do not. Similarly, researchers can estimate the ‘pay penalty’ for entering a care occupation by looking at the financial impact of changing from a care occupation to a non-care occupation requiring similar skills and education levels or vice versa.

Replacement costs also affect individual decisions, but valuations based on replacement cost—unlike those based on opportunity cost—do not reflect differences in individual preferences.4 They simply ask what the cost of a market substitute for a non-market good or service would be. This question, therefore, can only be answered with an ‘all else equal’ caveat.5 Even calculating the cost of replacement care is not as straightforward as one might think, since increased demand might drive up the price of paid care if enough people opted to purchase replacements for the unpaid care they were providing.

Choosing the appropriate wage rates for determining replacement costs is also a challenge. Market care at both ends of the age spectrum includes both low-paid workers, such as home care aides and family daycare providers, and relatively high-paid workers, such as nurses and teachers. A ‘specialist’ approach to valuing household production applies specific wage rates to various tasks. For instance, time spent preparing meals would be valued at a cook’s wage, and time spent engaging in complex medical procedures at a nurse’s wage. A ‘generalist’ approach uses a single wage—for instance, the wage of housekeeper—to value time spent in a range of activities.

4 In this respect, replacement cost estimates are like the market prices used in national income accounts, including imputations for the value of owner-occupied housing: what the homeowner would likely have paid in rent, had he or she been renting. 5 In more technical terms, it represents a partial equilibrium rather than a general equilibrium approach. 24 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 25

One early study of the U.S. by the National Bureau of Economic Research simply multiplied the number of women primarily engaged in housework by an estimate of an annual wages for women employed in ‘domestic and personal service’ (in other words, maids) (King et al. 1921). A few years later, economists Hazel Kyrk (1929) and Margaret Reid (1934) estimated the number of homemakers in the U.S. and suggested that higher wage rates might be appropriate. Many recent approaches to valuation of child care activities adopt a specialist approach, using different wage rates for interactive and supervisory care (Albelda et al. 2009) or distinguishing ‘developmental’ child care, such as teaching or reading aloud, from other activities (Bittman et al. 2004, Folbre and Yoon 2007b).

Both opportunity-cost and replacement-cost valuations are based on input valuation, multiplying the number of hours devoted to different tasks (ideally quality-adjusted) by some vector of wage rates. An alternative method, output valuation, estimates the total cost of a market substitute for a non-market good or service, subtracts the cost of capital, raw materials, and other non-labor costs, and takes the remainder as an indicator of the value of the labor. For instance, the value of preparing a hamburger at home can be calculated by asking what it would cost to purchase a comparable hamburger to go at a fast food restaurant, including the cost of transportation to the restaurant and back home. The value of the time devoted to preparing a hamburger at home can then be set as this output price minus the costs of the hamburger meat, bun, condiments, and other inputs, such as the cost of the gas or electricity used to cook it.

Rather than multiplying the number of hours a parents spends by an hourly wage rate, one could ask what it would cost to send a child to a daycare center for that many hours and subtract the non-labor costs associated with providing child care at home (such as extra space in the home or milk and cookies) to arrive at an output valuation of the unpaid labor time. A similar method can be applied to adult care using 24 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 25

the costs of adult-care centers or nursing homes. The Office of National Statistics of the United Kingdom has experimented with applying this methodology to its national income accounts (Holloway et al. 2002). The cost of market-provided services (e.g. the cost of sending a child or adult to a daycare center) can also be used as an estimate of the total value (rather than the value of labor inputs alone) of the non- market service. It is important to note, however, that market services can typically take greater advantage of economies of scale (particularly in supervision) than are individual households (Fitzgerald and Wicks 1990, Dalenberg et al. 2004).

Opportunity cost, replacement cost, and output valuation all represent important tools for valuation of non-market work, each with its own strengths and weaknesses. Opportunity cost is especially helpful in assessing the causes and consequences of individual decisions, but can be as much the result of those decisions as the cause.6 Replacement cost provides a sound accounting perspective consistent with national income accounts, but it can be difficult to assess the quality and intensity of the paid and unpaid work being measured to ensure that they are comparable. Output valuation provides a means of cross-checking input valuation but raises difficult questions about correct definition of output. In an ideal world of survey data, both input and output valuations of the market value of non-market care could be made and cross-checked with one another (National Research Council 2005).

3.2. Estimates of the value of unpaid work

Most estimates of the value of unpaid work are conducted on the national level using the rather approximate methods described above. Current estimates of the value of unpaid work in the U.S. —most of which fall into the categories of support care and interactive care—range from about 20 percent to 40 percent of Gross Domestic Product, depending

6 That is, opportunity cost may be endogenous, determined by the prior effect of norms or preferences. 26 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 27 on the method applied (Landefeld and McCulla 2000, National Research Council 2005, Giannelli et al. 2010). A similar range has been reported for the Philippines (Collas-Monsod 2010).

One study based on the American Time Use Survey disaggregated child care activities in 2003 into seven categories of supervisory and interactive care activities, applying a vector of wage rates ranging from the then-minimum wage of $5.15 for supervisory care to $25 an hour (close to the median wage for kindergarten teachers) for developmental care such as reading aloud and teaching (Folbre and Yoon 2007b). Focusing on households that included only children under the age of 12 in order to fully consider the impact of supervisory time, this study found that the value of child care services provided by women in these households totaled about $33,000 a year and the value provided by men about $17,100. By comparison, the annual wages for a nanny who did not live in with her employer that year averaged about $30,680 (Folbre and Yoon 2007b).

Breastfeeding is a time-intensive activity which, as aforementioned, fits technically under the definition of subsistence food production. Further, there is a small market for breast milk, based on specialized demand for the care of infants with special needs. Using market prices, Smith and Ingham calculate that the value of breast milk in Australia amounts to almost 1 per cent of Gross Domestic Product (Smith and Ingham 2005).

Estimates of the value of adult care in the U.S. have typically been based on surveys of that population, such as the National Long Term Care Survey or the National Health Interview Survey on Disability. As a result of differences in definition and measurement across these surveys, researchers often take an average or offer a range when estimating hours of care provided. One early study estimated the value of unpaid personal assistance to adults with disabilities at $168 billion in 1996, compared to $32 billion spent on paid personal assistance (LaPlante et al. 2002). 26 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 27

This study also found that the elderly were more likely than working-age adults with disabilities to rely on paid care.

A recent study offering state-by-state estimates of the value of family caregiving in 2004 uses a replacement-cost approach, applying an average of the minimum wage at the time ($5.15 an hour) and the average national wage rate for home health aides ($14.68), which comes to $9.92 per hour (Arno et al. 1999; National Family Caregivers Association and Family Caregiver Alliance 2006). A review of five different estimates that projected these to the U.S. population in 2006 found that the annual economic value of unpaid caregiving for adults was about $354 billion, more than total public spending on Medicaid and far higher than total spending nursing home and home health care (Gibson and Hauser 2007).

Studies that assign a market value to specific types of non-market care work in developed countries are few and far between. However, an important study of the value of time devoted to care of persons suffering from HIV infection in Africa points out that home-based care may actually be more expensive than institutional care (Akintola 2008). The Huairou Commission AIDS Campaign in Africa, which interviewed home-based caregivers in 13 countries, makes a case for public compensation for individuals caring for sick or disabled friends and family members (Hayes 2010).

3.3. Valuation of human capabilities

As Diane Elson puts it, ‘The ability of money to mobilize labour power for ‘productive work’ depends on the operation of some non-monetary set of social relations to mobilize labour power for reproductive work’ (Elson 1994: 40). The fulfillment of care responsibilities represents an indispensable contribution to the maintenance of social capital, an asset that the World Bank considers crucial to economic development (World Bank 1997). It is also responsible for the production and maintenance of human capabilities. 28 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 29

Older traditions of political economy have treated the productive capabilities of people as a form of wealth (Folbre 2010). Shouldn’t the capital value of a population also include its ability to produce future workers who would earn market earnings? Consider a woman who never works for a wage but devotes herself to raising three sons and three daughters and providing services for her husband. In a sense she is producing her son’s (and grandchildren’s) future earnings stream. But her contribution goes uncounted because it has no direct market analog.

This inconsistency has telling consequences. For instance, legal doctrines for compensation of wrongful death in the U.S. sharply distinguish ‘economic’ from ‘emotional’ loss, and define economic loss primarily in terms of loss of future earnings. Although legal practice is gradually shifting toward at least some consideration of the value of non-market services (Ireland 1997), the influence of estimates based on future earnings alone is apparent in the outcome of public compensation for the families of victims of 9/11. Because estimates of future earnings weighed heavily in the formula, average compensation for male deaths far exceeded that for female deaths (Feinberg 2006).

Yet unpaid care work clearly contributes to the development and maintenance of human capital. Investments in education pay off not just in terms of future earnings, but also in terms of child outcomes (Leibowitz 1973, Haveman and Wolfe 1984, Grossman 2003). A growing literature considers methods of assigning a market value to human capital. For the most part, however, this literature values human capital simply in terms of its impact on future earnings, devotes scant attention to the cost of producing human capital, and, to the extent that it considers cost, focuses on educational investments, ignoring inputs of parental time, money, and energy (Haveman and Schwabish 2002, Wei 2003). Time devoted to the care of family members is treated as production for own consumption rather than as an investment. By contrast, expenditures on education and health that move through the market economy are treated as an investment yielding a future flow of income or utility (Abraham and Mackie 2004). 28 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 29

Even if a sharp distinction is drawn between the biological production of children and the production of ‘human capital’ as a set of enhanced productive skills, parental time contributes to children’s readiness and ability to learn, and should therefore be considered an aspect of education. Likewise, family care contributes to individual abilities to benefit from medical inputs in the production of health, and therefore offers future benefits in that respect as well. It is difficult, if not impossible, to distinguish between consumption and investment activities in family care, and we do not suggest that time use surveys or satellite accounts should attempt to do so. However, the relationship between family care and human capital has implications for the interpretation of non-market accounts.

Furthermore, family care time may affect the overall efficiency of the production of health and education, with implications for measuring the relationship between inputs and outputs in these sectors. Time-use diaries linked with other sources of data can capture some important interactions. For instance, they can show how the time that parents spend reading aloud to their children affects school outcomes. Focused health surveys can collect information on diet, exercise, and emotional support that influence both the consumption of medical services and health outcomes. In the long run, it may be possible to develop a truly comprehensive ‘production function’ for human capabilities that specifies the relationship between non-market and market inputs and outputs.

3.4. The public benefits of care work

The market valuation of non-market care work provides a useful metric for comparing the relative importance of paid and unpaid work, but it distracts attention from an even more fundamental issue: the undervaluation of both types of work. Unlike sovereign consumers, care recipients often do not choose how much should be spent on them. The decisions made by third parties to spend on care are often determined by norms or altruistic preferences rather than by consideration of the 30 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 31 gain to either the recipient or to society as a whole. Yet the benefits of successful care typically spill over to other beneficiaries who don’t participate in private care transactions. In other words, the private costs and benefits of care decisions often diverge from the social costs and benefits. As a result, decentralized individual decisions may not lead to efficient outcomes.

Care work is not unique in this respect. Indeed, it is difficult to describe any private market transaction that does not create spillovers or externalities, especially given the growing sensitivity of global climate to carbon emissions. However, the public benefits of successful care are particularly large relative to the private costs, because care work contributes to the development of human capabilities that influence the quality of virtually all social transactions. Furthermore—perhaps as a result of that fact—most countries provide to at least some extent for dependents who can’t get the care they need from either the family or the market. The modern welfare state provides citizens with a means of partially capturing the benefits of care provision that enhance productivity: the imposition of taxes on future workers in order to finance current expenditures. Public liabilities represent, in essence, a claim on the income of the next generation.

Economists often emphasize the benefits of investment in human capital. Too often, however, they restrict this emphasis to investing in young children, although investing in the elderly also yields future benefits. The investments that we promise working adults in old age strengthen the social contract that ensures their contributions to investments in the young. But improved health and well-being in old age offers important gains in economic efficiency as well as intrinsic benefits. Elderly individuals make important contributions to our collective standard of living even when they have retired from paid employment by providing family care and engaging in volunteer work. 30 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 31

The emergence of social cost-benefit analyses of investments in early childhood education in the U.S. offers a fascinating prototype for efforts to estimate social spillovers (Folbre, forthcoming). Nobel Prize winner James Heckman has collaborated on the development of many detailed estimates of the potential for well-designed early childhood education investments to counter the effects of growing up in a disadvantaged environment (Heckman and Masterov 2007). Rob Grunewald and Art Rolnick of the Federal Reserve Bank of Minneapolis have published a number of reports using social rates of return as a rationale for greater public investment in early childhood education.7 A recent meta-analysis of the effects of 123 early childhood education interventions confirms large positive effects (Camilli et al. 2010).

In developing countries, considerable attention has been devoted to analysis of the health effects of conditional cash transfers such as the Mexican Progresa program, that provide mothers with small subsidies based on evidence of participation in health and education programs (including records of immunization and school attendance). Large positive outcomes for children’s health and education have been observed (Rawlings and Rubio 2005).

It is sometimes argued that the monetary valuation of non-market work is forced and misleading. Certainly, it can lead to the incorrect conclusion that the market provides perfect substitutes for non-market work. Development of satellite accounts must emphasize that the market metric can provide only a lower bound estimate of the value of family care—what it would cost society to provide an acceptable substitute. Advocates of the valuation of non-market work also need to join forces with environmental economists who are struggling with similar issues in developing alternatives to Gross Domestic Product (GDP) such as a Genuine Progress Indicator (GPI) (Waring 1999).

7 These studies are available at http://www.minneapolisfed.org/publications_papers/ studies/earlychild/index.cfm 32 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 33

4. Implications for Living Standards and Gender Inequality

Unpaid care work represents both a cost to those who provide it and a contribution to those who benefit from it. Thus, it has implications for the measurement of the level and the distribution of economic well-being, especially (though not exclusively) for comparisons of the economic well-being of women and men.

4.1. Variation in working hours

The simplest way to measure the costs of unpaid care work is simply to compare amounts of both unpaid and paid labor time provided by different groups and assess their implications for leisure time. The amount of time devoted to paid labor varies considerably across countries. International comparisons of GDP per capita yield very different rankings than those based on GDP per hour of paid employment. On average workers in the European Union devote 16 per cent fewer hours to paid employment per year than workers in the US (Rosnick and Weisbrot 2006: 2). Within countries, average levels of time devoted to paid employment vary considerably across income deciles, confounding measures of inequality in living standards based on measures of market income (Phipps and Burton 2007). Variations in the average levels of time devoted to unpaid work further complicate international comparisons of both the level and the distribution of economic well-being (Folbre 2008a).

In general, women devote considerably more time than men to unpaid work, and increases in hours of paid work do not typically lead to a one-for-one reduction in unpaid work. As a result, women’s combined workload (time devoted to unpaid and paid labor combined) is typically higher than men’s. However, considerable variation is evident across different countries and different types of households. Studies based on Australian data also show that women’s time tends to be interrupted or combined with care responsibilities than men’s leisure time (Bittman and Wajcman 2000, Mattingly and Bianchi 2003). 32 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 33

4.2. Intra-family inequality

While standard microeconomic theory treats the household as a unit, and presumes that it allocates members’ time efficiently, bargaining models predict that increases in women’s market earnings relative to men will decrease their share of unpaid work and/or increase their relative leisure time. Even where women and men work approximately the same total amount of hours in a household, women’s specialization in care makes them more economically vulnerable, for several reasons. Women typically become more attached to children and other dependents than men do, and often feel more compelled than men to make sacrifices on their behalf. Control over household resources matters, because women are more likely than men to devote resources they control to children. Specialization in family care also makes women particularly vulnerable to the effects of family dissolution, whether through divorce or widowhood. As a result, women have less bargaining power within the household.

Standard bargaining models take norms and preferences as exogenously given. Yet cultural norms clearly impose significant constraints on intra-family negotiation (Agarwal 1997). A large sociological literature emphasizes the way that cultural scripts shape how individuals enact or ‘do’ gender (West and Zimmerman 1987). Empirical tests of bargaining power models show considerable variation in results across countries, suggesting that cultural norms do indeed play a significant role (Fernandez et al. 2010).

Some explicit efforts have been made to model an interactive process of individual bargaining and cultural change. For instance, Shelly Lundberg and Robert Pollak (1993) outline a ‘separate spheres’ model in which cultural norms provide the fall-back in a non-cooperative game, but individuals may take advantage of the opportunity for mutual gains through cooperative bargaining. That bargaining, in turn, may modify 34 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 35 the norms that provide the fall-backs in the next round. In previous work I have argued that ‘gender-specific environmental parameters’, including public policies, affect women’s ability to bargain both individually and collectively over the distribution of household resources, including leisure time (Folbre 1998).

4.3. Time poverty

One approach to measuring inequality in leisure time develops a concept of ‘time poverty’ analogous to ‘income poverty’, using either an absolute or a relative standard. Time-poverty measures are typically based on a single representative day, rather than, as in the case of income, an annual estimate. Still, the measure provides a useful way of simplifying descriptive data, of calling attention to the impact of time on living standards, and of examining the relationship between different dimensions of poverty (Vickery 1977). A reduction in the amount of time available to engage in home production can lead to increases in the amount of money needed to maintain living standards (Douthitt 2000).

Absolute measures of time poverty are based on estimates of the minimum amount of non-work time necessary to maintain oneself or one’s family and may also include consideration of factors such as ‘household time overhead’—the minimum number of hours that a household must spend on unpaid chores to maintain itself (Harvey and Taylor 2002). Relative measures of time poverty are often based on a certain percentage of median non-work time or leisure time (Bittman 2002). A more sophisticated measure, taking potential as well as actual leisure time into account, has been applied to differences among European countries (Goodin et al. 2008).

Time poverty can be discretionary, and leisure time can be involuntary (as when individuals are unemployed). Time poverty can also be counterbalanced, to some extent, by high income (Folbre 2008a, 34 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 35

2008b). For instance, there is some evidence from the U.S. that while low earners once had less leisure time than high earners, that relationship has reversed in recent years (Costa 1998). However, women appear more vulnerable to time poverty than men, especially in households with children maintained by women alone (Harvey and Mukhopadhyay 2007). In developing countries time poverty and income poverty seem to go together, as indicated by important studies of countries as diverse as Guinea, Lesotho, and India (Bardasi and Wodon 2006, Lawson, 2008, Hirway 2010). These studies clearly show that time poverty is a dimension of inequality based on class, race, and ethnicity, as well as gender.

Time poverty is a source of stress and ill-health, and also imposes a constraint on household ability to escape income poverty. As Indira Hirway emphasizes, time devoted to activities such as fuel and water collection restricts labor market opportunities, reduces time available for developing capabilities through education, and tends to be associated with higher levels of work among children (Hirway 2010). Public infrastructure—such as improved access to water and electricity—is a major determinant of time poverty (Chakraborty 2010). Also relevant are improved consumer durables (such as more efficient wood stoves or refrigerators) and environmental regeneration (such as sustainable forestry practices)

4.4. Valuation of non-market work and living standards

Efforts to measure the impact of economic development on living standards depend heavily on how both economic development and living standards are defined. Our collective interest in comparing ourselves to others—and to ourselves at past points in time—has led reliance on conventional definitions, including an emphasis on family income. But family income is mismeasured if it includes only market income (such as earnings, interest, and profits), ignoring the market value of family- provided services (what it would cost to replace them were they not 36 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 37 provided). Imputation of the value of non-market work has important implications for measurements of differences across space and changes over time in living standards.

Indeed, reluctance to assign a value to non-market care work creates a systematic bias in comparisons between countries with differing levels of female participation in paid employment. One comparison of Germany and the US, for instance, shows that the greater amount of time that women devote to household work in the former country renders comparisons of market income misleading (Freeman and Schettkatt 2002). As women enter paid employment, the market income of their family goes up. Yet a substantial portion of that market income must be devoted to the purchase of substitutes for services once provided in the home.

For instance, if mothers lack the time to breastfeed their children, they must purchase a substitute in the form of infant formula. The premature weaning of children onto formula or solid food increases children’s vulnerability to malnutrition and disease and increases aggregate health costs. Because these costs are diffuse and spread over a long period of time, it is difficult to link cause and effect. But it is clear that increased pressure on mothers to enter paid employment without flexibility can have negative consequences. For instance, a statistical analysis of the impact of welfare reforms implemented in the U.S. in 1996 shows a small but significant negative effect on average levels of breastfeeding among low-income mothers (Haider et al. 2003).

Standard measures of market income ignore the value of government services, such as subsidized child care and elder care as well as the value of unpaid care (Folbre et al. 2010, Esping-Anderson 2009). Adding in the value of all these services to arrive at a measure of ‘extended income’ would obviously increase our estimates of family income, generating concerns that it would understate a very real dimension of poverty. But ‘extended income’ offers a much more complete measure of well-being 36 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 37

than market income, and also more appropriate for comparisons across differing institutional contexts. Further, trends in extended income are likely to appear quite different from trends in market income alone.

4.5. Valuation of non-market work and inequality in living standards

The implications of valuing non-market work extend beyond analysis of levels and trends, exerting a significant impact on the distribution of economic wellbeing. Most estimates suggest that extended income is distributed more equally than market income because there is less variation in the value of unpaid work than in household market income (Frazis and Stewart 2005). In general, imputation of a market value to women’s non-market work has an equalizing effect on measures of household income, not because low-income families do more non-market work but simply because most households devote about the same amount of time to such work (Folbre 2008a, 2008b).

For this very reason, use of extended income as a measure of household well-being leads to different conclusions about trends in household well-being over time than use of market income alone. Many studies have found that increases in women’s employment and earnings have lowered household income inequality in the U.S. and other countries in recent decades over the past forty years (Cancian et al. 1993, Cancian and Schoeni 1992, Harkness 2010). These studies, however, focus entirely on increased market income, ignoring the corresponding declines in the value of households’ extended income as unpaid care was replaced by paid care. Comparisons of the inequality of extended and market income suggest that extended income is distributed more equally; therefore, an increase in the relative importance of market income has probably increased overall inequality in living standards (Folbre et al. 2010).

Valuation of unpaid work has significant implications for income inequality across households. Consider two households with the same 38 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 39 level of market income and the same household composition. If one household includes an adult that specializes in the provision of family care and the other does not, the former household clearly enjoys a higher living standard (Folbre 2008a). Consider two couples, one consisting of two adults who spend 40 hours per week earning a total amount X, and one consisting of an adult who earns X and shares it with another adult who spends 40 hours a week providing domestic services such as shopping, cooking, and cleaning. The second couple does not necessarily enjoy any more leisure, but surely enjoys a higher level of consumption. Similarly, households that enjoy a significant quantity of unpaid care from non- resident family members—say, grandparents willing and able to provide child care while parents are working—enjoy a higher living standard than households with similar incomes that lack such assistance.

Even studies that rely entirely on measures of market income depend on assumptions regarding the relative consumption needs of family members. Standard equivalence scales used to adjust measures of household income for differences in household size and composition place a smaller weight on children than on working adults in calculating household needs, since they cost less to feed and clothe. In other words, a single mother with an infant is presumed to need less income than two able-bodied adults living together in order to maintain the same living standard. Taking the time cost of raising children into account would lead to a very different calculation, altering estimates of the relative well- being of households with and without children (Folbre 2008).

Similarly, the time cost of caring for adults needing assistance as a result of age-related or other disabilities should be factored into equivalence scales. Even middle-class and upper-class households in the developed countries have been affected by the rising cost of substitute care for dependents, which has been increasing at a significantly higher rate than wages and which is not accurately measured by aggregate cost- of-living measures. The U.S. Census Bureau recently announced plans to 38 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 39

develop a new Supplemental Poverty Measure (SPM) that will subtract some work-related costs, such as the child care expenditures of employed parents, to better capture real disposable income.8

In the wake of the 1996 welfare reforms in the U.S., both the labor force participation and market income of many low-income mothers increased—but no studies to date have fully examined the counteracting effects of reduced household production and increased out-of- pocket costs for childcare and other work-related expenditures (Christopher, 2005). As maternal employment increases in many developing countries, similar inconsistencies are introduced into measures of inequality in living standards there. At least two recent empirical studies estimate the impact of valuing non-market work on inequality across European households in recent years (Giannelli et al. 2010, Folbre et al. 2010). These studies show that high levels of non-market work exert an equalizing effect that is not captured by conventional measures, and suggest that the movement of women into market work increases overall inequality in living standards.

5. Economic Development and the Demands of Care

How does the process of economic development affect the organization of unpaid care? A recurrent theme in the above discussion is the impact of women’s entrance into paid employment, which receives additional attention below. But many other aspects of economic development influence the time and money devoted to unpaid care in the family and community: (i) the number of individuals who depend on unpaid care— aptly termed ‘dependents’; (ii) household size, composition, and mutual aid; (iii) the organization of productive work and (iv) provision of care services through the market and the state.

8 For an announcement of plans, see http://www.nytimes.com/2010/03/03/us/03poverty. html. For discussion of the supplemental poverty measure, see http://www.census.gov/ hhes/www/povmeas/SPM_TWGObservations.pdf 40 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 41

It is easy to offer reasons why the share of time devoted to direct care activities might decline in the course of economic development. In the category of demographic shifts, fertility decline is associated with a reduction in the dependency burden imposed by young children. The growth of public education and health facilities provide substitutes for unpaid family labor, and might be expected to reduce demands upon it. High wage differentials between the more developed and less developed countries augment the flow of legal and illegal immigrants available to provide relatively inexpensive services as nannies, child care and elder care workers. Increases in women’s participation in paid employment increase the opportunity cost of their time and intensify the spatial separation between women and dependents. The same processes may increase women’s bargaining power in both the home, leading to some redistribution of care responsibilities from women to men.

Yet a number of countervailing factors are also obvious. Increases in life expectancy and growth of the elderly population, particularly the proportion over age 85, create a new kind of dependency burden. Further, the intensity of care demands per child may increase, along with a shifting emphasis from quantity to quality of child care. For instance, parents may be expected to devote considerable time to helping children with homework. In truly poor countries, women may need to prioritize subsistence food production and food and fuel collection. As family income increases, the increase in discretionary time may lead to an increase in time devoted to care per dependent.

Both biological and ideological factors may limit substitutability between family care and purchased services. Furthermore, the effects of higher family income may outweigh the effects of higher opportunity costs on family decisions. Even in the advanced industrial countries, both the probability and duration of breastfeeding increase with maternal education and family income. Longitudinal studies in the U.S. suggest that the amount of time that parents living with children devote to their care has increased over time (Bianchi 2000). Further, maternal education 40 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 41

is associated with higher rather than lower levels of direct care time devoted to children, despite the fact that it is associated with higher wages, and therefore higher opportunity costs, for mothers (Bianchi 2000, Folbre and Bittman 2004).

Technological change can also affect the supply side through its effects on the division of labor. In economies characterized by family- based agricultural production and informal employment, care activities may be so integrated with other productive activities as to become literally invisible. If care becomes easier to define and measure in the course of economic development, it will appear to increase over time. Changes in the supply of non-parental care may also have an impact. As one folk saying goes ‘it takes a village to raise a child’. A mother living in a village may receive more supervisory assistance from elders, neighbors and friends than a mother living in an urban area.

What happens to the length of women’s total working day (both absolutely and relative to men) in the course of economic development? In a provocative paper analyzing time-diary data from 25 countries, Dan Hamermesh, Michael Burda and Philippe Weil (2007) report a negative relationship between real GDP per capita and the female-male difference in total work time per day. They argue that social norms drive this result, citing evidence from the World Values Surveys that female total work is relatively greater than men’s where both men and women believe that scarce jobs should be offered to men first. The evolution of social norms, however, may itself be driven by the process of economic development, which tends to shift the economic burden of dependency in profound ways.

5.1. Increases in women’s employment

Measures of women’s participation in economic development have improved significantly, albeit unevenly, in recent years. The development of a ‘gender approach’ to statistics has played an important positive role 42 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 43

(Corner 2002). Until 1993, the System of National Accounts excluded many aspects of subsistence production undertaken by women. Critiques of the undercounting of women’s work (e.g. Beneria 1992) have had a discernible impact. Positive examples are provided by the labor force surveys conducted by Statistics South Africa and the use of women fieldworkers in Indian surveys (Budlender 2002: 10, 19). Recent publications by the United Nations Economic Commission for Africa and the World Bank provide important examples of attention to time use in unpaid work (UNECA 2004, Blackden and Wodon 2006).

Increases in women’s employment often contribute to their empowerment both within the home and within the policy. However, countervailing effects are also apparent. As women earn more money, they may also shoulder new financial obligations. Intra-family inequalities—distinct from intra-household inequalities—are often reflected in increases in the share of households with children maintained by mothers on their own.

Even if the countervailing effects of increased responsibility for support of dependents are small, they may contribute to greater inequality among women. Single childless women and widows typically experience bigger gains in disposable income earned from wage employment than mothers of young children. Trends toward the ‘feminization of poverty’ and the ‘pauperization of motherhood’ have been observed in affluent countries like the U.S. that do little to protect low-income families against poverty (Folbre 1994, 2005). While these trends vary substantially across regions, they have also been observed in some countries of the developing world, particularly those characterized by high levels of income inequality and labor mobility (Chant 1997).

Increased participation in paid employment is often purchased at the expense of time once devoted to household production, personal care, sleep and leisure. New patterns of time allocation may also intensify 42 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 43

inequalities among women. Relatively well-educated, high-earning women are often able to engage in domestic outsourcing, purchasing substitutes for time they would otherwise have devoted to housework or child care. Poorly educated low-earning women typically have less flexibility. Women living in tightly knit rural communities may enjoy assistance from other female family members; recent migrants to urban areas may have less access to such forms of informal assistance. Age differences may also come into play. As young girls increase their participation in schooling, for instance, their reallocation of time away from housework and care responsibilities may increase the burden on mothers.

5.2. Dependency

Measures of dependency are often simply based on a standard numerical definition—the ratio of the population under the age of 15 and over the age of 65 to that in the so-called ‘working ages’ between 16 and 64. Worldwide, this ratio was about .59 in 2002. That is, for every person in the working age there was about .6 persons in an age group likely to be characterized by dependency. There are significant differences in the dependency ratio across major regions of the world. In Africa the number of total dependents per member of the working age population is almost twice as high as in Europe. Youth dependency follows a similar pattern—both Europe and North America carry a far smaller dependency burden than other regions.

The now affluent countries have clearly enjoyed a ‘demographic dividend’ from the reduced care burden associated with fertility decline, albeit one that will be reduced by increases in the proportion of the population over age 65 (Stark 2005). By 2025, increases in the share of the elderly population in Europe are projected to increase its total dependency burden over the world average, making it higher than that of any other region of the world other than Africa. As aforementioned, European policy makers are now quite concerned about the economic implications of below-replacement fertility rates. 44 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 45

Children and the elderly require very different types of care. The elderly generally require higher levels of spending on income maintenance and health than do children. Medical technology for treatment of diseases of old age has advanced enormously over the past fifty years, but is quite costly. In many of the affluent countries, a large proportion of all health care expenditures are devoted to individuals in the last few months of their life. Elder care itself has been ‘medicalized’. The growing cost of public pensions is also daunting.

But the temporal demands of the elderly on family members are generally lower, on average, than the temporal demands imposed by young children, for two reasons. Even those elderly who need assistance with activities of daily living (ADLs) such as shopping or eating can be left alone for extended periods of time. Indeed, many elderly people can and do help working-age adults provide supervisory care for children, even when their physical capacities are somewhat limited. While elderly persons with serious health problems such as dementia obviously require intense supervision, the incidence of such needs is unevenly distributed, with only a small percentage of families affected. Furthermore, in most affluent countries, elderly with serious health problems are likely to be either institutionalized or provided with other forms of public assistance As a result, the demographic dividend may continue to pay off in terms of reduced demands for unpaid care, even if aging imposes new strains on public budgets.

The UNRISD project has suggested an important refinement of age- based dependency ratios, weighting groups most likely to make temporal demands (under age 7 or over age 75) twice as heavily as others. This represents a constructive suggestion for detailed analysis of dependency, on the household as well as the national level. Definitions of dependency and dependency ratios based on age, however, can be misleading. Family illness is often a source of economic and temporal stress and tends to affect women’s time use more than men’s (for one empirical analysis, 44 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 45

see Pitt and Rosenzweig 1990). The HIV/AIDS crisis is increasing the need for family members to tend to the sick and orphaned, particularly in Sub-Saharan Africa (Mackintosh and Tibandebage 2006). In four Sub- Saharan countries, the percentage of adults suffering from HIV exceeds 30 per cent (U.S.A.I.D. 2002: 89). High levels of HIV infection in South Africa probably account for relatively high level of adult care registered there.

Whatever its causes, dependency should be contextualized. The age at which children become economically productive and, later, self- sufficient, varies considerably (as does the concept of childhood itself). In less-affluent countries, many children under the age of 15 contribute to household production and care provision, and some work on family farms or enterprises or participate in wage employment as well as entering paid employment and contributing to household income. In affluent countries, on the other hand, children typically remain financial dependents long past the age of 15. Co-residence is also relevant. In some countries, notably Italy and Spain, young adults often continue living with their parents long after they have entered formal employment. Parental provision of housing—and also basic housekeeping services—represents a significant subsidy to young adults.

The expansion of schooling diminishes temporal demands of older children who spend larger portion of their time under the supervision of teachers. It may, however, increase the temporal burden of young children on parents, as older children become less available to act as playmates or provide supervisory care. Time and money are, to some extent, substitutes: parents may spend less time with children precisely because they are spending more money on them (e.g. purchasing child care services). School fees and other costs associated with schooling are often significant, even if countries that provide universal primary and secondary education. Mandatory public education limits children’s ability to enter paid employment and contribute to family income. 46 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 47

Finally, it is important to note that dependency ratios may have a bigger impact on supervisory care than on care activities. Both young children and the very old spend a large proportion of their time sleeping, a factor which may help account for the fact that comparisons among some developing countries show that, contrary to initial expectations, the amount of time spent on care of persons tends to be larger where care dependency ratios are low (Budlender 2008b: 40).

5.3. Household structure, composition, and mutual aid

Sheer demographics play a role in the supply of, as well as the demand for unpaid care. Nations have dependency ratios: so too do households. Shifts toward smaller household sizes are a concomitant of economic development in most countries, driven by declines in the number of coresident adults. An analysis of the decennial censuses between 1880 and 2000 in the U.S. reveals a significant reduction in the number of adult females (such as older daughters and unmarried siblings) co- residing with mothers of children ages 0–5. Further, the likelihood that such coresident females were participating in education and formal employment increased over time, implying a significant reduction in their potential contributions to family care (Short et al. 2006). Changes in coresidence in development countries deserve closer attention than they have yet received.

Increased internal and international migration also lead to changes in household structure. Working-age adults are pulled toward regions with better job opportunities, often leaving both their elderly parents and their young children behind. The incidence of single-person households, particularly where male migrants live independently of female family members, can have a significant impact on the gender division of labor, as men have little choice but to provide for their own maintenance (Budlender 2008: 21). International migration of young women seeking jobs in the care sector of the advanced industrial economies, including 46 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 47

Latin American women moving into child care and elder care, and Filipina women moving into nursing in the U.S. seems increasingly common (Yeates 2010).

Increases in geographic mobility may also reduce mutual aid among households. Such trends can be captured by time-use studies as well as by specific survey questions. For instance, the U.S. Survey of Income and Program Participation (SIPP) asks a representative survey of the U.S. population: If your household had a problem with which you needed help (for example, sickness or moving), how much help would you expect to get from family living nearby? Five possible responses could be given: All the help I/we need, most of the help I/we need, very little of the help I/we need, no help, or don’t know, not applicable. The question was then repeated for ‘help from friends’ and ‘help from other people in the community besides family and friends, such as a social agency or a church’. An analysis of the 1992 survey showed that about 22 per cent were confident of help from all three sources, and 18 per cent were not confident of help from any source (Cotter et al. 2003). Unfortunately few studies have defined mutual aid in consistent terms that could be tracked over time.

Increased capital and labor mobility are reducing the economic implications of national boundaries. When working age adults raised and educated in poor countries migrate to rich countries, they provide a source of free human capital. The remittances these workers often send home may not be sufficient to repay the costs. The implications of this ‘brain drain’ are beginning to receive considerable attention (UNFPA 2005, World Bank 2006). A ‘care drain’ also comes into play, as many women in poor countries leave their families behind in order to work as child or elder care workers in rich countries. Migrants gain access to better employment, but their communities of origin lose caregivers. Host countries enjoy the benefits of the relatively inexpensive care that migrants provide. At the same time, the availability of migrants reduces the pressure to provide greater public funding for dependent care. 48 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 49

Social researchers are only beginning to consider the implications of ‘global care chains’ (Yeates 2005, Misra and Merz 2004). A better understanding of flows of money and time within the international care economy as a whole would help put the unpaid care services provided in households into context.

5.4. The organization of productive activities

Another supply-side factor relevant to unpaid care is the organization of market work. The higher women’s potential earnings outside the home, the higher the opportunity cost of her time to the household. Indeed, patriarchal property rights may have evolved partly as a result of the ways in which they increased the supply of care services and lowered their costs to men and children (Folbre 2006b). New opportunities for economic independence enhance women’s bargaining power, and may allow them to challenge traditional social norms. Differences in the length of women’s and men’s total work days (unpaid and paid work combined) seem to be smaller in the affluent developed nations than in less developed countries (Burda and Hamermesh 2007).

The spatial location and interruptibility of work matter. In a traditional agrarian household economy, women can combine productive and reproductive tasks, switching back and forth between child care and tasks such as weeding a garden, milking a cow, or weaving. Young children can begin assisting with these tasks at a relatively early age. Even where directly productive activities require women’s full attention, a location close to home makes it easier for women to provide supervisory or background care. In non-agrarian economies, family-based enterprises and self-employment make it easier for parents to combine productive employment with supervision of dependents.

Wage employment, on the other hand, typically takes place under conditions that are not conducive to supervisory care. Even where use of mobile phones allows parents to literally remain ‘on call’ they may 48 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 49

risk job loss if they leave work to tend to a child’s needs. The temporal structure of paid employment is also consequential. For instance, part- time or shift work makes it easier for mothers and fathers to stagger their child care responsibilities, an important option for many families in the U.S. (Presser 2003). Perhaps as a result of these complexities, multivariate analysis of the cross-national differences in time allocated to direct and indirect unpaid care activities seldom yields decisive results (Pacholok and Gauthier 2004).

Differences in survey methodology and public policy make it difficult to compare levels of female labor force participation across countries at differing levels of development. Considerable evidence suggests the relationship is non-linear, with women’s participation in directly productive activities first fall, then rising as opportunities for wage employment increase (Schultz 1990, Pampel and Tanaka 1986). In most of the developed world, including Europe, women’s labor force participation increased steadily over the last fifty years of the twentieth century (Rubery et al. 1999). This increase now seems to be leveling off. In the U.S. women in almost every category—with the small exception of single mothers—were no more likely to engage in paid employment in 2006 than in 1996 (Vanneman 2007). It will be interesting to see if patterns in developing countries follow a similar trajectory.

5.5. Provision of care services through the market and the state

Social policies in much of Northern Europe now provide considerable support for family care through paid family leaves from employment, family allowances, universal child care, and community-based provision for the elderly. European countries can be grouped according to different public care provision regimes, which also have implications for gender equality (Bettio and Plantenga 2004). A recent OECD report emphasizes the need for developed countries to deploy such policies in order to maintain both high rates of female labor force participation and replacement fertility rates (OECD 2007). It is interesting to note that 50 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 51 such policies can have contradictory effects on family time devoted to children: paid family leaves have a positive effect on time with infants, while public child care has a negative effect on time with toddlers (Bittman 2004).

As emphasized earlier, maternal employment contributes to women’s empowerment, and typically increases family income. However, it can also reduce the time that mothers have available to devote to children, and make it difficult for them to breast feed infants. Many empirical studies explore the effect of public policies on women’s labor force participation (Gornick and Meyers 2003, Lokshin 1999, Deutsch 1998). Studies of the impact of public policies on unpaid care to family members are subject to the many confounding factors described above. Still, some important patterns emerge. Analysis of Australian data shows that utilization of paid child care services tends to have a larger negative effect on parental time devoted to low intensity childcare (such as supervision) than on developmental child care (such as reading aloud to children) (Bittman et al. 2004). The non-routine aspects of care that affluent, well-educated parents in the U.S. prize can be shifted to evenings and weekends (Lareau 2003). One study of nine countries (including six European countries) finds evidence that the negative impact of maternal employment on maternal child care time is bigger in the U.S. than in other countries, perhaps as a result of less supportive public policies (Sayer and Gornick 2007).

Studies of maternal employment in several Asian countries suggest that both social-institutional and cultural context matter a great deal, and that workplace regulations making it easier for women to balance family care and market work responsibilities have a positive effect (van der Meulen Rodgers, forthcoming). Increased pressure on mothers to enter paid employment without flexibility can have negative consequences. For instance, a statistical analysis of the impact of welfare reforms implemented in the U.S. in 1996 shows a small but significant negative effect on average levels of breastfeeding among low-income mothers (Haider et al. 2003). 50 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 51

Interestingly, patterns of paternal child care seem to vary more across European policy regimes than patterns of maternal child care. One study of data from the European Community Household Panel between 1994 and 2001 shows that Danish fathers provide substantially more care than fathers in Spain and Italy (Confidential 2008). Public policies may also change the distribution of household time devoted to care, making it less sensitive to differences in household income.

As emphasized from the outset, economic development probably has countervailing and offsetting effects on time devoted to direct care. Measurement problems, especially the likelihood of a shift from less intensive and more diffuse forms of supervisory care to more direct engagement with children, complicate the picture. Still, comparisons among countries within the same region at very different levels of economic development offer some potentially useful insights.

The United Nations Research Institute for Social Development has recently begun to explore the relative importance of family, community, market and state in developing countries through a care ‘diamond’ approach (Razavi 2007, Franzoni et al. 2010). On a global level, neoliberal policies have intensified policy resistance to public care provision. Yet public social spending is growing in many countries, in both total and per capita terms. In many countries, social protection policies are characterized by extremely uneven coverage. Also, there seems to be a growing trend toward policies designed to offload costs from the market or state economy to the family. Indeed, many of the conditional cash transfer programs alluded to above rely heavily on the volunteer efforts of mothers (Molyneux 2006).

5.6. Public support for care work

Current national income accounting and data collection systems are not designed to follow the ‘circuits of care’. But some empirical efforts 52 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 53 to measure expenditures on care—and their distribution between men and women are underway (Addis 2003, Folbre 2005). The burgeoning literature on gender budgeting in developing countries could and should be extended in this direction (Budlender and Hewitt 2002). Public spending on programs for children and the elderly reduces the burden of family care, and makes it easier for women to balance competing responsibilities. Most countries rely on taxes with a higher incidence on male than on female productive effort. As a result, increased reliance on public provision generally shifts care costs away from women more toward men. Most microeconomic analyses of gender inequality compare men’s and women’s propensities to spend on child-related goods, or differences in child outcomes related to male or female control over market income. Few efforts have been made to examine the larger ‘macroeconomic’ distribution of the costs of caring for children and other dependents.

In recognition of the important work that parents do, the United Nations Convention on the Rights of the Child, ratified by all nations except Somalia and the United States, stipulates that ‘the nation shall provide appropriate assistance to parents in child-raising’. What exactly is appropriate assistance? Most northwestern European countries offer family allowances and paid parental leaves from work as well as publicly supported childcare and education (Gauthier 1996, Kamerman and Kahn 2001, Gornick and Meyers 2003).

Even these benefits, the most generous in the world, cover only a small percentage of parental expenditures. These countries have probably socialized a greater percentage of the benefits of children than the costs: their pension systems tax the working age population to provide support for the elderly. As a result, non-parents generally fare better economically than parents. This pattern has been particularly well documented for women in the United States and the United Kingdom (Waldfogel 1997, 1998; Joshi 1990, 1998). 52 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 53

5.7. Indices of care responsibility

Despite the accumulation of data regarding time devoted to care, these are seldom linked to measures of other resources devoted to care, or summarized alongside other measures of economic well-being. One way to move in this direction would be to develop a series of summary indices of care responsibility. Existing measures of progress in the development of women’s capabilities, such as the Gender Development Index (GDI) and the Gender Empowerment Measure (GEM) developed by the United Nations Human Development Office, don’t explicitly assess women’s care responsibilities. The GDI aims to assess women’s relative health and well-being. The GEM aims to assess participation in activities traditionally dominated by men: paid employment, professional and managerial jobs, and share of parliamentary seats. Other indices such as the Human Poverty Index (HPI) or a Relative Status of Women (RSW) index proposed by Dijstra and Hanmer (2001) could provide useful supplementation, but these too largely ignore care responsibilities.

In previous work I have outlined six possible indices of care responsibility modeled after the GDI and GEM (Folbre 2006). The first two indices are individual measures that would allow for comparisons of levels of care responsibilities between men and women. The second two indices focus on the share of money costs and time costs, respectively, devoted to dependent care. The fifth measure assumes that a monetary value could be imputed to non-market work to combine a measure of money and time expenditures. The sixth measure includes consideration of segregation in paid employment as well as the gender division of labor in unpaid direct care.

(i) Individual Disposable Income (IDI). As an alternative to measures of per capita income (household income divided by number of family members), surveys could aim to measure individual income (earned income plus income from property plus transfers from others) minus taxes paid to the government minus transfers 54 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 55

for the care of dependents. This measure extends the concept of ‘disposable’ or ‘after-tax’ income to treat spending on dependents as analogous to a tax. This measure would require collection of data on household income, expenditure, and saving. It could be used to develop a better measure of individual poverty than current measures, which are typically based on household rather than individual income.

(ii) Individual Disposable Time (IDT). By analogy with IDI above this measure would examine the amount of time ‘left over’ for an individual after they have fulfilled responsibilities for paid and unpaid work. This measure can be constructed in a straightforward way from existing time use surveys by summing leisure time and personal care (including sleep) time. A similar measure has already been operationalized in the African Gender and Development Index, as a variable within the ‘social power’ block (UNECA 2004: 50, table 3). However, it is important to note that much of the time that women report as leisure is accompanied by child care constraints; this time needs to be adjusted or ‘discounted’ in some way in order to make it comparable with truly unencumbered leisure. An Individual Disposable Time measure could be used to provide an estimate of time poverty either by setting an absolute standard for the amount of time that individuals require for leisure and personal care, or by setting a relative standard, such as an IDT below 50 per cent of the median.

(iii) Gender Care Spending Parity Index (GCSPI). Private male spending on care of dependents divided by total private spending on care of dependents, multiplied by 200. This simply represents men’s share of monetary outlays on dependents, normalized so that perfect equality would obtain the value of 1. Note that this could be extended to include public spending, but this would require analysis of the gender incidence of taxation as well as spending. 54 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 55

(iv) Gender Direct Care Parity Index (GDCPI). Male unpaid time devoted to the direct care of dependents divided by total unpaid time devoted to direct care of dependents, multiplied by 200. As with the measure of IDT, this measure cannot be based purely on ‘primary activities’ but must include consideration of the burden of supervisory care.

(v) Gender Overall Care Parity Index (GOCP). This is essentially a combination of 3 and 4 above, using quality-adjusted replacement cost to assign a monetary value to direct care time. The numerator would include the sum of male spending on dependents and the value of male direct care time. This total would be divided by is the sum of total private spending on care plus the total value of direct unpaid care.

(vi) The Gender Care Empowerment Index (GCEI). An equally- weighted sum of men’s proportion of direct unpaid care hours relative to women’s direct unpaid care hours and men’s proportional representation in paid care work occupations relative to women’s representation. This represents the mirror image, in a sense, of the current Gender Empowerment Index. Instead of measuring women’s participation in the ‘masculine’ sphere, it measures men’s participation in the ‘feminine’ sphere. While construction of these indices would require extensive data analysis, it would provide a means of assessing shifts in the distribution of the costs of caring for dependents over time, revealing both the impact of economic and demographic change and the role of public policy.

6. Toward an International Research Agenda

The changing organization of unpaid care is clearly one of the most important, yet understudied, dimensions of economic development. Many specific suggestions for conceptual and empirical research are embedded 56 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 57 in the discussion above. It seems useful, however to summarize three pressing needs:

(i) Improved time-diaries. The basic building block of any analysis of unpaid care is measurement of unpaid time inputs. While great progress has been made on this front, with the proliferation of time- diary studies, conventional measures focus primarily on ‘activities’ and largely ignore the role of supervisory or ‘on-call’ time for children, the sick and disabled, and the frail elderly. As a result, they understate the tremendous extent to which care of dependents constrains participation in more directly productive activities.

(ii) Improved valuation of household production. Most efforts to impute a value to non-market work rely on labor input valuation, simply multiplying the number of hours devoted to unpaid care times an estimated replacement cost wage rate. Apart from the fact that (based on point 1 above) hours are typically underestimated, this method is crude and approximate. Wherever possible, it should be supplemented by output-based methods, with close attention to the degree of substitutability between unpaid and paid care. Even more pressing is the need to develop a better understanding of household production functions that consider the importance of joint production of material and emotional well-being.

(iii) Improved methods of accounting for the distribution of the costs of unpaid care. Considerable research reveals that women bear a disproportionate share of the costs of unpaid care. Yet we know relatively little about how the distribution of these costs changes over time. We also know relatively little about how these costs are divided between parents and non-parents, between families and the state, or between current and future generations. More attention to these issues could usefully inform growing debates over the ‘future’ of welfare state policies. 56 IEG Di s t i n g u i s h e d Le c t u r e 5 Un p a i d Ca r e a nd Ec o n o m i c De v e l o p e m e n t 57

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IEG Distinguished Lecture Series

1. Herring, Ronald: ‘Global Rifts Over Biotechnology: What Does India’s Bt Cotton Experience Tell Us?’ December 2009.

2. Basu, Kaushik: ‘Does Economic Theory Inform Government Policy?’ September 2010.

3. Elson, Diane: ‘Econimic Crises and Unpaid Work in Low and Middle Income Countries: A Gender Analysis’ November 2010.

4. Uvalic, Milica: “Insights from a Transition Economy: The Case of / serbua’ Habyary,