214 | REAL WORLD MICRO the rate of growth of GDP When women's labor force paniclewis lends has in the United States since the mid 1990s, the rate of growth of GDP ,d individuals who repu At least some part of the difference in growth rates tovel like two probes Morere Time Use Survey, ad wow the Current Popula reflects the increased "countability" of wornen's work. Conderation of the microeconomic consequences licit plan shape. Several studley have used th chon, When households collectively supply more labor hours to the margin Market incomes go up. But they have to use a substantial portion of Aw is called a 'satellite" nation to purchase substitutes for services they once provided on their oweyou Non replacing the conventional more money on meals away from home for pre-prepared foods and charles Faceded GDP" makes the the increase in their money incomes overstates the Improvement in theit gas news of how the economy has Cointing the value of m disposable income A disturbing example of policy relevance emerges from consider / household income, not bec cause most households of sin changes in public assistance to single mothers implemented in the Unko! ! 1996, which put increased pressure on these mothers to engage in pald englesson Here again, the trends are mo Many studies proclaimed the success because market income in manyof lies anace of Beer-market work ha lies went up. Bur much of that market income had to be spent paying fussy du declined, O such as childcare, because public provision and subsidies fell short. DeS: You've also written extensively about "caring labor"? What is caring liber To what extent is this labor (and the output of services associated with an) dirculyou indirectly captured by conventional measures like GDP? NE. Everything I've discussed above is about quantity. Bur quality is also important I define caring labor as labor where the quality of the services provided is likely in be affected by concern for the well-being of the care recipient. Love, affection, and commitment almost always enhance the care of dependents, and this is a big icons why market-provided services are not always perfect substitutes for those provide by family members and friends. On the other hand, many people-especially women-work in occupation like childcare, eldercare, education, medicine, or social services where they pas inely care about their clients or "consumers," The market value of this work counted as part of Gross Domestic Product and household income But in mag cases, the wage paid is considerably less than the value of the services provided. Workers in these jobs often give more in the way of quality than they are actually paid for. De-S: As a practical matter, how could one go about measuring the value of units currently provided by unpaid household labor? In your estimation, how would put picture of economic life change if we did? NE: It is pretty easy to estimate a lower-bound for the value of unpaid work by counting the number of hours that people spend engaging in it (which in the linked States adds up to almost exactly the same total as hours of market work), and mun plying those hours times the hourly wage one would pay for a replacement. Measures of hours worked in different activities such as meal preparation, chill care, cleaning, shopping, and so on are typically based on a nationally representativeCHAPTER 7: LABOR MARKETS | 215 cipation levels oaks will ofGDP wenton hese two parede sin any of individuals who report all of their activ r activities on the preceding day. The ren Time Use Surveys administered since 2003 on an annual basis as a sup- s explain till phobia The to the Current Population Survey, provides reliable, high-quality data on several studies have used these data to assign a dollar value to non-market work in artdon of thou toc their own-spending i called a 'satellite national income account (because it revolves around, rather hen reposting the conventional account). Obviously, including this value in a measure dish, and childain I'mended GDP" makes the economy look bigger. More importantly, it revises esti ent in their posed ke f how the economy has grown over time-in the downward direction. Counting the value of non-market work has an equalizing effect on measures consideration alike (household income, not because low-income households do a lot more of it, but the United States in hecant most households of similar size and composition do about the same amount. in paid employner Here again. the trends are more interesting than the levels: since the relative impor- 1 many of the fire paying for KTvos ulo declined. nose of non-market work has declined over time, its equalizing effect has probably That is caring labor with it) dileadya y is also important rovided is likely an ove, affection, and this is a big reaves or those provided k in occupation where they peau- of this work a e. But in many vices provided hey are actually aluc of services ow would out paid work in in the Vignet Q). and aker ent. ation, childCHAPTER 7. LABOR MARKETS | 213 Article 1.5 olenrial for tally HOUSEHOLD LABOR, CARING LABOR, UNPAID LABOR sent in every week AN INTERVIEW WITH NANCY FOLBRE September October 2015 Falbre is a professor emeritus of economics at the University of Manachieths Amherst. She is the author of numerous books, including Who Pays for the Kids! Gender and the Strictures of Constraint (1994), The Invisible Hearn Economics and Family Values (2001), and Valuing Children: Rethinking the Economics of the family (2008), related to household and caring labor. Dollars & Sense: You've written about the tendency in economics to view house- hold labor (and especially women's labor) as "unproductive." Can you explain how this is reflected in conventional macroeconomic measures? Nancy Folbre: Non-marker household services such as meal preparation and childcare are not considered part of what we call "the economy." This means they lierally don't count as part of Gross Domestic Product, household income, or household consumption. This is pretty crazy, since we know that these services contribute to our liv- ing standards and also to the development of human capabilities. They are all at least partially fungible: time and money may not be perfect substitutes, but there is clearly a tradeoff. You can, in principle, pay someone to prepare your meals (as you di in a restaurant), or to look after your kids. If you or someone else in your household provides these services for no charge (even if they expect something in return, such as a share of household earnings) dat leaves more earnings available to buy other things. In fact, you could think of household income after taxes and after needs for domestic services have been met as a more meaningful definition of "disposable income" than the conventional defini- mon, which is simply market income after taxes. DeS: What is the practical consequence of not measuring household labor and pro- duction? Are economic policies and institutions different, especially in their impact on women, than what they would be if household labor were fully reflected in sta- tikies on total employment or output? NF: One macroeconomic consequence is a tendency to overstate economic growth when activities shift from an arena in which they are unpaid to one in which they are paid (all else equal). When mothers of young children enter paid employment. for instance, they reduce the amount of time they engage in unpaid work, but that reduction goes unmeasured. All that is counted is the increase in earnings that results, along with the increase in expenditures on services such as paid childcare. As a result, rapid increases in women's labor force participation, such as those typical in the United States between about 1960 and the mid-1990s, tend to boost