WUNRN
Carl Brinton
Research presented at 2007
Civil Society Development Forum
in Geneva in preparation for
UN ECOSOC Meetings.
MacroecoMomics
Household Satellite
Accounts and the Millennium Development Goals
Carl Brinton, Worldwide Organization for Women (WOW)
Rapporteur, Working Group on Women's Employment and
Economic Development (WGWEED), NGO Committee on the Status of Women
Introduction
Despite
the failures that continue to plague development efforts as the world works to
achieve the Millennium Development Goals (MDGs), oftentimes we continue using
the same failed methods. Critics routinely fault traditional measures of economic
development, such as the Gross Domestic Product (GDP) for being out of touch
with reality. Though the GDP has its use, it fails to represent the whole
economy of a region or nation. For instance, it doesn't count any work done
notably by women in the home as “productive.” This oversight penalises women
not only in the home, but also in the workplace as their labour is consistently
undervalued all over the world. However, since the
UN's Fourth World Conference on Women in 1995 there have been greater efforts
to correct this shortcoming by including unpaid household work in the System of
National Accounts (SNA) (used to calculate the GDP). One approach to
addressing this issue is the use of household satellite accounts (HHSA), which
economists and policymakers would use in tandem with the GDP. While HHSA will
increase the perceived value of work done by women whether in the home or in
the workplace, various problems hamper its effectiveness. As such, the
Working Group on Women's Employment and Economic Development (WGWEED) is
studying HHSA studies, results, and methodologies in order to point out several
discrepancies in methodology that lack sufficient gender sensitivity. The year
after Beijing the UNDP conducted a worldwide study valuating unpaid work. That
HHSA, valuated at $16 trillion, was worth 70% of the world GDP, and more than
two-thirds of that work was done by women. Indeed, HHSA is a critical
battleground in the fight for both sustainable development and gender equality.
The
idea of valuating unpaid work is not new. In fact, Norway included unpaid
housework in its GDP until 1950 when the UN's first effort to standardise
national accounting practices asked that unpaid work be excluded in favour of a
universal methodology.[1][1] But a veritable revolution in the true sense of the word didn't gain
momentum until the Beijing Platform. Since then, studies done by national
governments (e.g. UK, Finland, Australia) have added on to those already done
by international organisations (e.g. Eurostat, International Labour
Organization) and academics (e.g. Duncan Ironmonger, Heinrich Lützel,
Lehka Chakraborty).
Purpose
Despite these recent advances, lack
of gender sensitivity and other problems continue to plague HHSA. In an effort
to understand and improve the implementation of HHSA, WGWEED has reviewed
several recent HHSA set up in developed nations. This paper commissioned by
WGWEED hopes to accomplish two things by the propagation of HHSA:
- Increase the perceived
value of unpaid work, especially done by women
- Decrease wage disparity
between men and women doing paid work.
We seek to do this first by
discussing the results of several recent HHSA studies, then we present several
links between HHSA and the MDGs. Finally, by discussion we hope to formulate
specific recommendations to be made to ECOSOC and other bodies.
HHSA Studies
World
study by UNDP: This rather basic study was conducted just after the Beijing
Platform in 1995. It showed the great potential for valuating unpaid work,
estimating it at a massive $16 trillion. It further disaggregated the data by
gender and found that more than two-thirds ($11 trillion) of the work was done
by women.[2][2] The ramifications of this study on how we women and development are
vast. No longer can we study development without taking into account the nearly
equal contributions of those who make development possible, but have not shared
in as many of its benefits.
Australia:
The Australian Bureau of Statistics (ABS) continues to improve its valuation of
unpaid work. It started in 1992 (before the Beijing Platform) by setting up an
HHSA. In 1997, it expanded its methodology by including hybrid wage assignment
estimates, making it the only national study to include this method. In 2007,
ABS is concluding a third HHSA to come out in November. The greatest strength
of the ABS studies is that they incorporate different methodologies while using
the same data. This affords researchers the purest methods to compare the
different methodologies. From the results summarised in the appendix, we see
that gross wages led to a 14% increase over net wages (wages after tax),
suggesting that the use of net wages may be an undervaluation as the system of
national accounts uses gross figures. Moreover, while the difference between
the gross opportunity cost method and the replacement cost methods were great,
the difference between the net opportunity cost method and the replacement cost
methods were not significant. This suggests that the opportunity cost method
might not be as inflated as has been assumed. The most interesting aspect of
the study, however, was the use of the hybrid method, which resulted in
estimates closer to the specialist method than to the generalist method. ABS
defined the hybrid method by what Australians usually paid for. They usually
hire housekeepers to clean, while hiring specialists to care for children and
household maintenance, so ABS calculated the hybrid wage by those criteria.
Such results give an increasingly accurate picture of the value of unpaid work
in Australia and have already started to be used in government and academia.
Other countries ought to follow their methodological lead.
Canada:
This study shows the marked difference between the opportunity cost and
replacement cost methods. Not reflected in the appendix, the study
disaggregated work load by gender, and found that not only did women do more
than two-thirds of the unpaid work, but women also engaged in more work
overall, which has been found to be the case in other countries as well. Such
gender-disaggregated statistics will open the eyes of the world to the gender
inequalities that exist and persist.
Estonia:
Conducted with the help of Eurostat, this study is the newest of the group
(published in 2006) and uses refined input methods as suggested by the Eurostat
task force paper.[3][3] It also used rather basic methods, which enabled a smaller groups of
statisticians with fewer resources to set up the HHSA. This cooperation could
be the model for international and regional organisations as well as developed
nations aiding developing nations in setting up HHSA.
Finland: Though Finland
employed the generalist replacement input method, the task force wrote in the
report: “In the future, we also wish to be able to use output method to
determine the value of production.”[4][4] They recognised the limitations of the input method, and called for a
mixed approach. Especially given the comparative undervaluation of women's
unpaid work by the input method, the output method has added importance and
potential to promote gender equality.
Japan:
This study, sponsored by Japan, India, and the UN was actually conducted by the
private company Sumitomo Life-Research Institute, Inc. The jobs correlated with
tasks performed by unpaid workers were lacking in equivalence (e.g. time spent
in childcare was given the wage of a kindergarten teacher). It is interesting
to note that if the valuation of hours of paid work were to use the same
methodology as this study, the result would be a mere 29-45% of the GDP, which
begs the question: if paid work doesn't even amount to half of the GDP, where
does the GDP come from? Comparing the HHSA to the GDP, it would then be worth
50% rather than 20%.
Testing
my hypothesis that these concerns were merely a reflection of division of
labour and wage disparity between the sexes, I calculated the HHSA using male
wages rather than disaggregated wages (using the specialist replacement
method). The results were telling. There would be a 57% increase in total value
of unpaid work. 92% of the value of unpaid work would be done by women (up from
87% in the original study), and unpaid work would be worth 31.4% of the GDP.
This supported the hypothesis that the bias in the study seems to be merely a
reflection of 1.the uneven distribution of unpaid work between the sexes and
2.the wage disparity between the sexes. And seeing that the wage disparity
comes from the undervaluation of women's work in the home, this study clearly
displays the vicious cycle that is undervaluation of women's work.
New
Zealand: This study was not disaggregated by gender, which fails to show
division of labour or accurate valuation of the value of women's work. Furthermore,
the study did not include consumption additions to input. This simplified form
of HHSA might allow more countries to set up HHSA without using too many
resources, but the caveat is that in the future, the results must be
disaggregated by gender or they will not reflect the true economy of the
country.
United
Kingdom: This was a seminal output method study. The report included
spreadsheets, graphs, and in-depth discussions of which methodological
decisions were made and why. In addition to the methodology, the results were
invaluable. At 77% of the GDP, this study exceeded even UNDP's estimates. The
HHSA per capita would equal nearly $18,000, meaning that the unpaid working
done by the average citizen of the UK was valued as greater than the GDP per
capita of 85.7% of the nations in the world, including Spain, New Zealand, and
South Korea. And given that two-thirds of that work was done by women, the HHSA
per capita of women would be estimated at nearly $23,500, greater still than
the GDP per capita of Australia, Germany, Ireland, Italy, Liechtenstein, and
Sweden.
HHSA and the MDGs
- Eradicate Extreme Poverty and Hunger – One of the reasons that the majority of those in extreme poverty
and hunger are women[5][5] is that their work is
consistently unvalued and undervalued. They often lack access to credit
due to lack of wages, social status, land, and property. They lack income
security, especially in old age, as unpaid work does not provide a
pension. Often, unpaid work then leads to paid work, as in the transfer of
home and subsistence farming into the market and income earning
activities. Finally, women are by far the socially poorest in the world.
Poverty is not merely economic, but more generally about empowerment and
social inclusion. Many women are disempowered and cannot provide for
themselves and their children due to a lack of social status.
By valuating unpaid work, women will have
increased social status and increased economic status. HHSA will put households
and their welfare visible to policymakers. It will encourage pro-poor policies
that will feed the hungry, provide microcredit for those who have few or no
assets, and provide pension compensation for unpaid workers.
- Universal Primary Education – Education in the home is
already close to being universal. Improving education in the home is as
important as and interrelated to providing formal education for all
children. Valuating unpaid work will give a clearer understanding of the
situations in the homes of each country and will bring more focus to the
role of the home in the education and the future of children.
- Gender Equality and Women's Empowerment – The lack of valuation and undervaluation of women's paid and
unpaid work is a vicious cycle.[6][6] To break from this cycle
and empower women both at home and in the workplace, HHSA will increase
the perceived economic and social value of women's work.
- Reduce Child Mortality,
5. Improve Maternal
Health, 6. Combat HIV/AIDS, Malaria, and other
diseases – Health ought to start in the home, not in
the hospital. Through viewing and valuing work done in the home,
especially by mothers, governments and the UN can better know the
situation in the home and empower the women who do most of the unpaid work
there. As the world has seen: empowering mothers improves the health of
the entire family.
- Ensure Environmental Sustainability – The HHSA includes information on energy use in households
including on transportation for members of that household. As household
consumption is a large factor in overall energy consumption and homes each
have ecological footprints, this information will be critical for policies
on energy and environment. Furthermore, the HHSA includes volunteer work,
much of which is done for civil society and non-governmental
organisations, who contribute much, inter alia, to the sustainability of
the environment. In fact, it is in such volunteer work that men tend to
make large contributions.
- Develop a Global Partnership for Development - Since the Beijing conference, no developing nations have
conducted major national studies on unremunerated work, while most of the
developed nations have. As part of the global partnership for development,
developed nations ought to assist developing nations in valuating unremunerated
work through setting up household satellite accounts at the national
level.
Conclusion
Much
work remains to be done in setting up and analysing HHSA. Only through adequate
quantitative measurements will government leaders and policymakers fully
understand the importance of unremunerated work to enable and support
breadwinners, families, and children, providing the world with not only
sustainable development but sustainable families and a sustainable future as
well.
Appendix
|
Country |
Year |
GDP[7][7] |
HHSA |
% of GDP |
Method[8][8] |
Author |
|
World[9][9] |
1995 |
$23,000 |
$16,000 |
69.6% |
RC-S[10][10] |
UN Development Programme |
|
Australia[11][11] |
1997 |
$423.6 |
$203.4 |
48% |
RC-S |
Australian Bureau of
Statistics |
|
|
|
|
$184 |
43.4% |
RC-G |
|
|
|
|
|
$201 |
47.5% |
RC-Hybrid |
|
|
|
|
|
$264.1 |
62.3% |
OC-Gross[12][12] |
|
|
|
|
|
$204.1 |
48.2% |
OC-Net |
|
|
Canada[13][13] |
1996 |
$700.5 |
$214.4 |
30.6% |
RC-S |
Statistics Canada |
|
|
|
|
$290 |
41.4% |
OC |
|
|
Estonia[14][14] |
1999 |
$7.9 |
$3.0 |
38% |
RC-S |
Statistics Estonia |
|
|
|
|
$2.13 |
27% |
RC-G |
|
|
|
|
|
$4.58 |
58% |
OC |
|
|
Finland[15][15] |
2001 |
$133.5 |
$61.81 |
46.3% |
RC-G |
Statistics Finland |
|
Japan[16][16] |
1996 |
$2,850 |
$570 |
20% |
RC-S |
Dept. of National Accounts
(Japan) |
|
|
|
|
$433.2 |
15.2% |
RC-G |
|
|
|
|
|
$661.2 |
23.2% |
OC |
|
|
|
|
|
$894.9 |
31.4% |
RC-S |
Carl Brinton |
|
Nepal[17][17] |
1991 |
$3.0 |
$1.398 |
46.6% |
RC-G |
Meena Acharya |
|
New Zealand[18][18] |
1999 |
$54.92 |
$21.42 |
39% |
RC-G |
Statistics New Zealand |
|
UK[19][19] |
2000 |
$1,360 |
$1,057 |
77.7% |
Output[20][20] |
Office of National Statistics
(UK) |
Input Method[21][21]
1. Opportunity cost: wages an unpaid worker could be making
doing paid work instead.
2. Replacement cost: wage would be for a paid worker to replace
the unpaid worker
Simply put: TIME x WAGE = VALUE
(often intermediate consumption and capital consumption are added as inputs to
the net value added)
There are three ways of determining which wage
to apply:
a. Specialised market wages – Prevailing wage among specialist labour
in the market (e.g. wage for janitor in a business building, wage for nurse in
day care centre)
b. Specialised home wages – Prevailing wage among specialist labour
in the home (e.g. wage for household cleaner, wage for nanny)
c. Generalised wages – Prevailing wage among generalist labour
in the home (e.g. wage for a housekeeper or nanny)
d. Hybrid wages – A combination of two or more of the
above three wage assignment methods
Output Met
hod[22][22]
Output: goods and services produced by the household (Housing, Transport,
Nutrition, Clothing & Laundry, Childcare, Adult Care, Voluntary Activity)
Intermediate Consumption: the value of those goods and services purchased
to enable production output (e.g. ingredients bought to enable nutrition
output)
Adjustments: some of the housing, transport, etc.
output value is included in the price of other outputs (e.g. electricity used
for cooking is included in the output of nutrition, so it should be subtracted
from housing output as to avoid double counting)
Capital Consumption: the value of capital inputs (e.g. the household capital for housing output or vehicle capital for transport output)
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