Unpaid work and the economy: Linkages and their implications

Abstract

This paper argues that the strong linkages between unpaid work and the economy make it necessary to expand the purview of the conventional economy to incorporate unpaid work and to include it in the analysis of labour and employment as well as in designing policies in this field. Unpaid work, which is the work that does not receive direct remuneration, includes unpaid work that falls within the production boundary of the System of National Account (SNA) and unpaid work that falls within the general production boundary but outside the production boundary (non-SNA). The former unpaid work is a part of the conventional economy while the latter work, on which 35-50 % of the total work time is spent by economies, is outside the national income accounts and is usually invisible in national statistical systems. This paper points out that the exclusion of unpaid non-SNA work from national accounts and from the conventional economy is not justifiable, as both works contribute to the conventional economy in several ways. The uneven distribution of unpaid work across the gender is at the root of gender inequalities and it also implies the sub-optimal use of the national labour force. In the remaining part of the paper, the linkages of the unpaid work and the economy and the different approaches of integrating unpaid work with the macro-economy are discussed. In conclusion, it is noted that implementation of these different approaches calls for a sound database (including regular production of quality time use statistics) and suitable analytical tools to analyse the data. The paper recommends that the time has come for economic analysis and policy, including macro-economics to take a wider view of the economy. Without incorporating unpaid work, it would remain partial and wrong. The time has also come for labour economics to incorporate unpaid work into the analysis of labour and employment for formulating realistic and efficient labour and employment policies.