Nancy Folbre's View on Valuing Domestic Product - Article Example

The unpaid domestic workers offer a supplementary role to the employed member of households, roles that would have been paid for if they were for example taken over by a house help. The article illustrates this with the example of marrying a paid worker thereby ceasing to pay. This will reduce the gross domestic product while divorce in the arrangement to effect payments for the services would increase the gross domestic product. This identifies the significance of unpaid domestic work to the gross domestic product (Folbre, 2012).

Another identified issue in the article is the undervaluation of the value of unpaid domestic works. One of the reasons for the underestimation of unpaid domestic work is its equivalent rating with the average rate for commercial household workers. The difference in family-based skills, and probable self-interest in unpaid domestic work, however, illustrates a higher value for the unpaid work. As a result, published estimates are less than the actual value of unpaid domestic work. Similarly, the estimates exclude many roles played by unpaid workers (Folbre, 2012).

The author also identifies the changing trend in the number of unpaid domestic workers and the dedicated amount of time by homemakers who still perform unpaid domestic work. Trends in employment, especially among women, have led to a reduction in the number of people who perform unpaid domestic labor. Similarly, those who are still dedicated to it have a reduced invested time in the work. The reason for such reduced time is the technological developments that provide time efficiencies and cheaper substitutes. These have also led to the loss of significance of unpaid domestic work (Folbre, 2012).

The article also explains the role of homemakers, unpaid domestic workers, as social and economic equalizers. This is because their shift from domestic chores into paid works leads to a significant difference across households a factor because of the less volatility in the value of domestic chores as compared to employment opportunities (Folbre, 2012).

Why full-time homemakers are income equalizers
Full-time homemakers are income equalizers because the value of domestic roles and domestically generated products are less volatile than the value in employment opportunities and market products. This means that the homemakers generate almost equal utility levels to harmonize the differences from the breadwinners’ market income. The transition from full-time homemakers to the employment market however increases wage rate inequality. Similarly, the shift from a full-time homemaker into an employee means that market product whose values are highly volatile substitute the almost uniformly valued domestically produced products. The volatility factor is less significant in domestic roles than in the market, therefore, explains the role of full-time homemakers as income equalizers (Folbre, 2012).

Unpaid household work in Canada
The value of unpaid household work in Canada is estimated to fall within the range of between 35 percent and 55 percent of the country’s gross domestic product (Perelman, 2011). This translated to almost 300 billion dollars in the year 1998 (Hamdad, 2003). There is however a policy controversy on the best approach to measuring this value. The two commonly proposed methods are the cost of hiring an alternative household worker to perform the same task as the unpaid worker or the opportunity cost in the employment market. This is major because the two approaches yield different values because of differences in industrial wage rates. Using the employment of an alternative household worker for example limits the valuation to one industry while the opportunity cost approach subjects the valuation to a wide range of possible valuations. The great controversy is therefore the fact that no accurate measure exists for valuing unpaid household work (Perelman, 2011). Read More