Economic Value of Unpaid Work in India (GS Paper 2, Social Justice)
Why in News?
- A recent research paper has highlighted the economic value of unpaid work, particularly that undertaken by women in India.
- Unpaid work, which includes domestic tasks, caregiving, and other forms of household responsibilities, is often overlooked in official economic metrics.
- Despite this, it plays a vital role in the economy, especially in countries like India, where women bear a significant portion of the burden.
- The research underscores the need to recognise this unpaid labour in national productivity measures to achieve gender equality and improve economic outcomes.
- This issue is of particular relevance in the context of India's development goals, which include empowering women and creating sustainable economies.
What is Unpaid Work?
Unpaid work refers to the tasks people do that are not compensated with wages or salaries. It often includes activities essential for the functioning of households and communities. While traditionally women bear the brunt of unpaid work, it can also involve other individuals engaged in care work, voluntary service, or subsistence activities.
Types of Unpaid Work:
- Domestic Work: Cleaning, cooking, and childcare.
- Care Work: Taking care of elderly family members or those who are sick or disabled.
- Community Services: Volunteering in community activities.
- Subsistence Production: Growing food or producing goods for personal use rather than for sale.
Economic Contribution of Unpaid Work
Though unpaid work is not directly accounted for in Gross Domestic Product (GDP) calculations, its value is significant. This work supports the economy by allowing paid workers to engage in the formal labour market, providing essential services like childcare, caregiving, and domestic work.
- In Developing Countries: Unpaid work often forms a significant part of the economy, especially in rural areas, where the lack of formal labour markets makes household labour essential.
- In India: Unpaid work is estimated to contribute about 7.5% of the nation's GDP, amounting to Rs 22.7 lakh crore in 2023-24. This figure reflects the economic value of household chores, caregiving, and voluntary work, much of which is done by women.
Gender Disparities in Unpaid Work
Women disproportionately bear the burden of unpaid work due to traditional gender norms, which view domestic tasks and caregiving as women's responsibility. This unequal distribution has profound implications on gender equality and economic independence.
Key Findings on Gender Disparities:
- Women’s Time Use: According to the Time Use Survey 2019, 81% of women aged 6 and above spend more than five hours a day on unpaid domestic work, with the figure climbing to 85% among women aged 15-29 and 92% for those aged 15-59.
- Men’s Time Use: In contrast, only 24.5% of men (aged 6+) spend over an hour daily on unpaid domestic tasks.
- Caregiving: A higher percentage of women, 26.2%, spend more than two hours a day on caregiving, compared to 12.4% of men. The gap widens significantly in the 15-29 age group, with 38.4% of women engaged in caregiving, as opposed to just 10.2% of men.
This disproportionate division of unpaid work severely limits women's access to paid employment, education, and skill development, reinforcing cycles of economic dependence and inequality.
Valuing Unpaid Work in Economic Terms
A key aspect of the research is the economic valuation of unpaid work. The study used two methods to estimate the value of unpaid household work:
- Opportunity Cost (GOC): This method estimates the value based on the wages individuals forgo by doing unpaid work instead of paid employment.
- Replacement Cost (RCM): This method calculates the value by assuming these tasks could be done by paid workers, using market wages for similar services.
Using these methods, the paper estimates the economic value of unpaid household work in India for the year 2019-20 as follows:
- GOC Method: Rs 49.5 lakh crore (24.6% of GDP)
- RCM Method: Rs 65.1 lakh crore (32.4% of GDP)
These figures highlight the significant economic contribution of unpaid work, which is currently excluded from the official measures of economic activity.
Policy Recommendations to Address Unpaid Work
The research stresses the need for policy reforms to better recognise unpaid work and reduce the gender gap in caregiving. Key policy recommendations include:
- Recognition in National Accounts:
- Unpaid care work should be formally recognized in national economic measures like GDP. While the System of National Accounts (SNA) has included household production in GDP calculations since 1993, unpaid care work remains excluded.
- Promote Gender Equity:
- Implement policies that encourage gender equality in the workforce, such as offering paid parental leave, flexible working hours, and equal pay for men and women.
- Investment in Care Infrastructure:
- Governments should increase investment in childcare, eldercare, and healthcare services. This will reduce the unpaid caregiving burden on women and promote greater participation of women in the formal economy.
- Improved Data and Research:
- Continued research is needed to refine methods for quantifying unpaid work and to explore its impact on the economy.
- Encourage Shared Responsibility:
- Launch national campaigns to challenge traditional gender roles and encourage shared responsibility for caregiving and household chores between men and women.
Global Perspectives on Unpaid Work
- Unpaid work is a global issue, with varying economic impacts across countries. According to a 2022 study by APEC (Asia-Pacific Economic Cooperation), unpaid work contributes approximately 9% of GDP across APEC economies, totaling around USD 11 trillion.
- In some countries, such as Australia, unpaid work contributes up to 41.3% of GDP, while in Thailand, it accounts for 5.5%.
- This highlights the need for globally coordinated efforts to value unpaid work in a way that addresses both gender inequality and the need for economic sustainability.
Why are Women More Involved in Unpaid Work?
The gender imbalance in unpaid work is driven by several factors:
- Cultural Norms and Gender Roles: Traditional views assign caregiving and household work as women’s responsibilities, making it largely invisible and unrecognised.
- Economic Constraints: In many households, women’s unpaid work is seen as a cost-saving measure, particularly in low-income families.
- Lack of Public Services: Insufficient investment in affordable childcare and eldercare services forces women into caregiving roles, limiting their ability to participate in paid employment.
- Limited Job Opportunities: Women in rural areas or those with lower education levels often face fewer opportunities for formal employment, pushing them into unpaid domestic and care work.
Conclusion
- Recognising and valuing unpaid work, especially that performed by women, is essential for achieving gender equality and fostering economic growth.
- Incorporating unpaid work into national accounts, alongside policies that support gender equality and fair distribution of unpaid labour, will lead to a more equitable society and a sustainable economy.
- Addressing these issues is crucial not only for women’s empowerment but also for India’s overall economic development and alignment with global sustainable development goals.
