Calculating the value of labour

Kristiina Aalto

IATUR Workshop, Turku, July 29, 2014

Outline/Structure

Value of labour =

Amount of time spent on domestic work * hourly wage

• (Definition of domestic work)

• Time consept

• Wage consept

Time concept

• Domestic work

• Time spent on primary activities

• To use secondary activities would be complicated

• The time use of all household members (age of

10/15+)

• Domestic work has economic signifigance, whether

people enjoy the work they are doing or not

Principal functions of household production

•

Providing housing Providing meals and snacks

Providing clothing and clothing care

Providing care Volunteer work

Principal activity

Purchase of housing Own-account construction and renovation of dwelling Decorating, cleaning and maintaining dwelling, maintenance of yard, gardening Small repairs and renovations

Growing foodstuffs, picking berries, mushrooms, etc., hunting and fishing Preparing meals and snacks Baking, preserving

Production of clothing Washing and ironing clothes. Repairing clothes and other care

Childcare Care of adults in need of help. Caring for pets.

Neighbourly help Voluntary work in organisations

Shopping

Purchases related to renovating, maintaining and cleaning dwelling

Buying groceries Buying appliances and utensils for cooking

Buying clothes, buying materials and equipment for making clothes and their care Buying shoes

Buying equipment related to childcare and caring for adults in need of help.

.

Travel and transportation Vehicle maintenance

Travel related to acquisition and maintenance of dwelling.

Travel related to buying groceries.

Travel related to buying clothes and their care.

Transporting children and adults in need of help to care, hobbies, etc.

Travel related to volunteer work.

Household management Planning and organising activities, services, banking, etc, apply to all principal functions

Productive activities included in the core national accounts are shown in blue. (Varjonen, Hamunen & Soinne, 2014)

Travel time

• There is no consensus on how travel time should be

treated (see for example (Eurostat, 2004):

• a separate task or part of a principal functions?.

• Some studies include travel time into the time

devoted to the activity to which the travel is leading

• for example travel to the store is incorporated into shopping

time, travel to work into paid working time, etc.,

• Driving someone else (e.g. a child or a relative) can

be delegated and is productive

• Self-transportation can only be partially delegated

Shopping time &

planning and organizing activities

In a similar way as travelling time,

• shopping time can be included in housing, meals

and clothing

• Time for planning and organizing activities is included

in principal activities

Household production or not – and if yes, in which

function?

7

Action No

HHP

HHP

Ho

usin

g

Meals

Clo

thin

g

Care

Vo

lun

tary

wo

rk

Baking a cake for your family

Wash the clothes

Reading a book to a child

Going for a gym

Paying bills

Sending email to a friend

Getting your hair done

Taking your child into a soccer training

Cutting your neighbors lawn

Reading a book alone

Wage concept

• Replacement cost or opportunity cost method?

• Generalist’s or specialist’s wage?

• National practices in outsourcing unpaid work

• The use of generalist’s wage is easier

• The use of specialist needs more decisions

Generalist’s wage

Were to find the generalist’s wage?

• E.g. International Standard Classification of Occupations

ISCO-88, category (e.g. Finnish version)

• 51331 Municipal housekeepers/ home helpers

ISCO-08, categories

• 3221, Nursing associate professionals

• 5152, Domestic housekeepers &

• 5322, Home-based personal care workers

Specialist’s wage

• Housing: a domestic cleaner and helper, a

gardener, a building caretaker, various

building workers (e.g. carpenter, painter)…

• Meals and snacks: a cook, a kitchen helper…

• Clothing: a sewing worker, a laundry worker…

• Care: a nanny or a baby sitter…

• Volunteer work: various options

Gross or net wages?

1. Net wages

• To be integrated into the core national accounts

• Earn the money by producing the services themselves

• In multinational comparisions

•

2. Gross wages (incl. taxes)

• To buy services from the market

3. Gross wages with employer contributions (incl. taxes

and social security contributions)

Working time concept

• Paid working time includes holidays, sick leaves, and

daily coffee breaks...

• Data from time use surveys include only actual

working time

Summary

Value of labour =

Amount of time spent on domestic work * hourly

wage

Thank you!

email: kristiina.aalto@ncrc.fi

www.ncrc.fi