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4102.0 - Australian Social Trends, 2001  
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Contents >> Income and Expenditure >> Income Distribution: Value of unpaid work

Income Distribution: Value of unpaid work

The value of unpaid work was 16% higher in 1997 than in 1992. However, when expressed as a proportion of GDP, the value of unpaid work fell from 54% to 48% over this period.

Unpaid work, by its very nature, involves no monetary transactions and covers activities performed in the household and community. However, along with paid work, unpaid work contributes to the wellbeing of individuals, families, the community and the economy more generally. Its importance was explicitly recognised in the 1993 revision of the international System of National Accounts which contained provision for the measurement of unpaid work through a supplementary system of satellite accounts.1 Placing a monetary valuation on unpaid work is one way of measuring how trends in unpaid work are changing over time and how this relates to the market economy.

Unpaid work comprises two components: unpaid household work and unpaid volunteer and community work. The unpaid work done in households sustains families and individuals, and the way this work is shared within households affects members' participation in paid work, leisure, and other activities. Unpaid volunteer and community work builds networks in the community, and complements the assistance provided within families and households, enabling society to function more efficiently and with less reliance on government involvement.

This article focuses on the value of unpaid work. The distribution of the value of unpaid work between men and women and across activities is closely related to the relative participation levels and the amount of time spent on unpaid work by men and women.

This is discussed in more detail in Australian Social Trends 2001, Time spent on unpaid household work.


Unpaid work
The ABS has estimated the value of unpaid work for 1992 and 1997. More information on these estimates can be found in Unpaid Work and the Australian Economy (ABS cat. no. 5420.0).

In this article unpaid work refers only to work performed outside the market economy. This comprises unpaid household work and unpaid volunteer and community work. It does not include work performed without payment by persons in family businesses or on farms, as this work is considered to be part of the market economy by international statistical conventions.

When measuring unpaid work, a widely accepted principle for determining its scope is the "third person criterion". That is, if it is possible to pay someone else to perform a task (e.g. cleaning or child care), it is regarded as unpaid work. For practical and cultural reasons, this criterion is not always applied. For instance, the emotional care of adults is not regarded as unpaid work because although someone else (e.g. a counsellor) could be paid to provide emotional care, in practice it would be largely provided by family and friends.

Estimates of the value of unpaid work are the product of three components:
  • estimates of average time spent per person on the various household and community activities considered to be unpaid work;
  • population estimates; and
  • wage rates selected for household and community activities. (This method assumes that household members and market replacements are equally productive).

Improved methodology in valuing unpaid work in 1997 may have impacted slightly on comparability with the 1992 estimates.


Growth in the value of unpaid work
In 1997, the value of unpaid work was $261 billion compared with $225 billion in 1992, a rise of 16%. The total hours spent on unpaid work also increased from 19.0 to 19.4 billion hours. These increases reflect rises in wage rates and population numbers. However, over the period, the value of unpaid work as a proportion of GDP fell from 54% to 48%. Several factors contributed to this fall.

First, unpaid work is largely undertaken by women. Between 1992 and 1997, the labour force participation rate for women rose by 3%, while the participation rate for men fell by 1%. This meant women had both less time to perform unpaid work and more income to purchase replacement services from the market. In keeping with this, the value of unpaid work performed by women decreased slightly from 64% to 63%. Similarly, the demand for formal child care increased. Between 1993 and 1996, the proportion of children aged under 3 years enrolled in formal child care increased from 17% to 22%.2

Second, unpaid work is valued using wage rates for occupations which correspond to selected household activities. These occupations have, for the most part, low skill levels. Their associated wage rates grew more slowly between 1992 and 1997 than did wage rates for more skilled workers. For example, the wage rate for domestic housekeepers rose by only 9% over the period while the wage rate for all workers rose by 22%.2

VALUE OF UNPAID WORK(a)

1992
1997


hours per year (billions)
$billion
%
hours per year (billions)
$billion
%

Type of unpaid work
    Household work
17.6
207
92
17.7
237
91
    Volunteer and community work
1.5
18
8
1.8
24
9
Contribution
    Males
6.5
81
36
6.7
97
37
    Females
12.5
144
64
12.7
164
63
Total
19.0
225
100
19.4
261
100

Value of unpaid work as a proportion of GDP
. .
. .
54
. .
. .
48

(a) Of persons aged 15 years and over where the activity was the main activity.

Source: Unpaid Work and the Australian Economy 1997 (ABS cat. no. 5240.0).


Third, there were different economic conditions in 1992 and 1997. In 1992 Australia was emerging from a recession, while in 1997, the economy was stronger. GDP rose by 32% over the period.

While much of the unpaid work undertaken in households needs to be done regardless of economic conditions, when there is a strong demand for labour in the market economy (i.e. during periods of growth), unpaid work will decline as people move into paid employment.3 When this occurs, less unpaid work is done as people either modify their unpaid work practices (e.g. cleaning less often or cooking simpler meals) or purchase replacement services from the market (e.g. by using child care services or buying takeaway food).

As a result, not only is the value of unpaid work less responsive to changes in economic conditions than paid work, its value decreases relative to paid work during times of economic growth (and vice versa). Consistent with this, the value of unpaid work did not experience the same rate of growth as paid work and GDP between 1992 and 1997.

Other factors such as the changing size and composition of households, trends in housing, and rapid growth in technological innovation may also have impacted on the value of unpaid work.


ASSIGNING VALUE TO UNPAID WORK
The ABS used an individual function replacement cost method to estimate the value of unpaid work in 1992 and 1997. This method assigns value to the time spent on unpaid work according to what it would cost to pay someone else to do the job. For example, time spent on gardening is valued at the rate of pay for a commercial gardener. The table below shows how commonly Australian households used market replacements for selected domestic activities.

PROPORTION OF HOUSEHOLDS WHICH USE MARKET REPLACEMENTS, 1997

Market replacement
%

Dry cleaning, ironing or laundry service
14.7
Domestic cleaner
7.5
Gardening/lawnmowing service
13.8
Meals in a restaurant(a)
52.7
Takeaway food(a)
56.6

(a) At least one meal in the last fortnight of the survey.

Source: ABS 1997 Time Use Survey.


Unpaid household work
In 1997, unpaid household work accounted for 91% of the value of unpaid work, with 65% of the value of this work being performed by women. Women who were not employed contributed the greatest proportion, at 37%. Conversely, a greater share of unpaid work was attributed to men who were employed (21%) than men who were not (15%). In part, this reflects the fact that a higher proportion of men than women are employed. For all persons, the activities which accounted for the highest proportions of the value of unpaid household work performed were food and drink preparation and cleanup (22%), child care (13%), purchasing (13%) and transport (12%).

However, the proportions of the value of all unpaid household work attributed to men and women varied for some activities, which partly reflects the differing amount of time spent by men and women on these activities. For example, food and drink preparation and cleanup made up a larger proportion of the value of women's total activities (24% for women who were employed and 27% for women who were not) compared with men’s (16% and 18% respectively). Similarly, laundry, ironing and clothes care, (11% for employed women and 10% for women who were not employed) made up a greater share of the value of unpaid work performed by women than that performed by men (3% regardless of whether or not they were employed).

DISTRIBUTION OF THE VALUE OF UNPAID HOUSEHOLD WORK, 1997

Males
Females


Employed
Not employed(a)
Employed
Not employed(a)
Total

Activity
%
%
%
%
%
    Food and drink preparation and cleanup
16.4
18.2
23.5
26.6
22.4
    Laundry, ironing and clothes care
2.9
3.2
10.9
10.3
7.9
    Other housework
6.6
9.0
12.2
14.1
11.3
    Gardening, lawn care and pool care
10.8
17.1
4.2
6.1
8.2
    Pet care
2.8
3.2
2.0
2.0
2.4
    Home maintenance
11.5
12.0
1.5
1.2
5.0
    Household management
6.1
4.8
4.2
3.6
4.4
    Communication
0.7
0.5
0.6
0.4
0.6
    Transport
14.5
11.9
13.3
10.2
12.2
    Child care
13.5
6.1
13.7
14.9
13.0
    Purchasing
14.2
14.1
13.8
10.6
12.7
    Total
100.0
100.0
100.0
100.0
100.0

Share of the value of total unpaid household work
20.7
14.9
27.5
37.0
100.0

(a) Unemployed or not in the labour force.

Source: Unpaid Work and the Australian Economy 1997 (ABS cat. no. 5240.0).


Conversely, there were some activities which made up a greater proportion of men's share of the value of unpaid household work compared with women's. Home maintenance made up 12% of the value of unpaid household work done by men for those both employed and not employed, compared with between 1% and 2% of that performed by women. Gardening, lawn care and pool care also comprised relatively greater shares (11% for employed men and 17% for those who were not employed, compared with 4% and 6% respectively for women).

The proportion of the value of unpaid work attributed to various individual activities performed by women varied little according to whether or not they were employed. However, for men there were two activities for which the proportion of the value of unpaid work for employed men varied noticeably from the proportion for men who were not employed. This is because men’s participation in employment is closely related to their age.

Younger men, that is men of the age most likely to have dependent children, tend to be employed. Conversely, men who are not employed are more likely to be past retirement age and therefore less likely to have young children. This is reflected in the higher proportion of the value of child care for employed men (14% compared with 6% for men who are not employed). In contrast, outdoor activities such as gardening, lawn care and pool care constituted a larger share of the value of unpaid work performed by men who were not working than by those who were (11% and 17% respectively). This partly reflects the greater time available for unpaid domestic work of this kind to men who are not employed compared with those who are employed.


INTERNATIONAL COMPARISONS
The following estimates are presented as proportions of GDP to facilitate comparisons between estimates which are calculated in the currencies of individual countries.

There are numerous methodological differences between the various studies listed, particularly in terms of the scope of the studies and reference periods used. The estimates also reflect the different economic, social, cultural and climatic conditions in different countries.

VALUE OF UNPAID WORK(a)

Country
Scope(b)
Reference year
Proportion of GDP
%

Australia
UW
1992
54
UHW
1992
50
UW
1997
48
UHW
1997
43
Canada
UHW
1992
41
UW
1992
43
Germany
UW
1992
71
New Zealand
UW
1990-91
52
Norway
UHW
1992
37
Switzerland
UW
1997
52

(a) Using the individual function replacement cost method.
(b) UW refers to unpaid work; UHW refers to unpaid household work.

Source: Unpaid Work and the Australian Economy, 1997 (ABS cat. no. 5240.0).


Unpaid volunteer and community work
In 1997, unpaid volunteer and community work comprised 9% of the value of unpaid work. The relative shares of the value of this unpaid work for women and men were 56% and 44% respectively. As with unpaid household work, the largest share was attributed to women who were not employed (35%).

DISTRIBUTION OF THE VALUE OF UNPAID VOLUNTEER AND COMMUNITY WORK, 1997

Males
Females


Employed
Not employed(a)
Employed
Not employed(a)
Total
Activity
%
%
%
%
%

Adult care
3.3
6.9
5.7
9.7
6.7
Volunteer work
72.1
75.2
74.1
74.6
74.0
Associated travel
23.9
17.4
19.6
15.3
18.8
Associated communication
0.8
0.5
0.7
0.4
0.6
Total
100.0
100.0
100.0
100.0
100.0

Share of the value of unpaid volunteer and community work
25.1
19.1
21.4
34.5
100.0

(a) Unemployed or not in the labour force.

Source: Unpaid Work and the Australian Economy, 1997 (ABS cat. no. 5240.0).


The proportion of the total value of volunteer and community work attributable to individual activities varied to some degree between men and women who were employed and those who were not. For employed men and women, adult care constituted a smaller proportion of their share of the total value of unpaid volunteer and community work than was the case for those not employed (6% and 3% for employed women and men respectively, compared with 10% and 7% respectively for women and men who were not employed).


Unpaid volunteer and community work
Volunteer work refers to active unpaid involvement in community based organisations, and helping or doing favours for family and friends (living in other households), and others in the community.

Adult care refers to the physical care of adults who are elderly, sick or who have a disability, or other adults (including helping with personal hygiene).


Endnotes
1 Australian Bureau of Statistics 2000, Unpaid Work and the Australian Economy, 1997, cat. no. 5240.0, ABS, Canberra.

2 Australian Bureau of Statistics 2000, Unpaid Work and the Australian Economy, 1997, cat. no. 5240.0, ABS, Canberra.

3 Ironmonger, D, 1989, ‘Households and the household economy’, in Households Work, ed Ironmonger, D., Allen and Unwin, Sydney.

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