A Modified Approach of Valuing Unpaid Household Work in the UK Considering Multitasking and Adjusting for Quality and Productivity.

Abstract

While unpaid work activities contribute significantly to a country’s economy, a large amount of those activities is not included in the Gross Domestic Product (GDP), but various approaches can be applied to estimate this contribution, and assign a monetary value to them. However, the currently dominating approach used for the valuation of labour (VoL) does have some known weaknesses that lower the accuracy of calculations. The aim of this research is to modify that approach by taking consideration of simultaneous activities, quality and productivity. This is hoped to increase the accuracy of the valuation. Further, gender differences are considered and the impact of selected demographics on quality is investigated. Based on the findings, recommendations to policy makers and practitioners are given to support the development of a harmonised approach. In line with a review of the literature, a quantitative research design was applied for the modifications. The original contribution to knowledge of this study is the implementation of up to three adjustments to the dominating VoL approach. One adjusts the time to account for multitasking, the other two adjust the specialist wage rates for quality and productivity. This is the first time three adjustments were implemented in a single approach. This study relied on secondary data from the UK Time Use Survey and the Annual Survey of Hours and Earnings, and used an online questionnaire to collect primary data for adjustments, gender effects, and a regression analysis on demographics. The VoL was calculated for various adjustments and the magnitude of the modifications was compared to the dominating approach using a housekeeper and unadjusted specialist wage rates. The regression investigated whether selected demographics affect the quality of unpaid household work. The findings suggest that the commonly applied housekeeper wage rate may not act as a lower boundary for the VoL. The results also showed that wage adjustments on quality and productivity vary by gender and the activity performed. Contrary to previous recommendations, an equal split of multitasking activities (1/n) could not be confirmed, because splits differed up to 9%. Further, estimated adjustments levels were different to the often arbitrary recommendations in literature. This was also the case when all three adjustments were considered together. For the total UK economy, the implementation of adjustments would improve the VoL by up to 5.29% of the UK’s annual GDP, depending on the chosen modification. Unexpected was the finding that women reported a higher productivity level than men. The presence of children, gender, marital status, education and personal level of health were found to be relevant demographics to impact on the quality of unpaid household work. The major implications this study hopes to make are to increase the accuracy of the VoL and support the development of a harmonised approach for the VoL.