Syllabus
GS Paper 3 – Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
Context
Valuing women’s unpaid contributions can reshape our understanding of economic productivity.
Source
The Hindu| Editorial dated 1st November 2024
Recognising the economic value of unpaid work in India
The issue of unpaid care work and domestic responsibilities, particularly performed by women, has gained attention for its significant yet unrecognized contributions to the economy. Although essential, these activities remain outside the System of National Accounts and are not reflected in Gross Domestic Product (GDP) .
Measuring the economic value of unpaid household work in India highlights the need for policy reforms to acknowledge this labour. This analysis underscores the gender disparity in unpaid work and calls for greater economic recognition of women’s contributions.
Gender Disparity in Unpaid Labour
- Time Allocation: Women not in the labour force spend over seven hours daily on unpaid care and domestic work, while employed women dedicate 5.8 hours.
- Gender Contrast: Employed men spend only 2.7 hours daily on these tasks, highlighting a stark gender disparity.
- Impact on Workforce Participation: This burden of unpaid work limits women’s ability to enter or remain in the workforce.
- Policy Advocacy: Addressing these imbalances requires policies that recognize the economic contributions of unpaid labour, aiming for gender equity in economic metrics.
Methodology of Valuation
- Data Source: Analysis uses data from the Consumer Pyramids Household Survey (CPHS) by the Centre for Monitoring Indian Economy (CMIE), covering 2019-2023.
- Valuation Methods: Two methods are applied to estimate the economic value of unpaid work:
- Opportunity Cost (GOC): Calculates value based on forgone earnings had individuals pursued paid work.
- Replacement Cost (RCM): Values unpaid work as if performed by market workers with comparable wages.
- Scope of Analysis: The study assumes wage consistency across ages, acknowledging potential upward or downward biases in valuation.
Global Recognition of Unpaid Work
- Sustainable Development Goals (SDGs): The UN’s SDG 5, Target 5.4 emphasizes valuing unpaid care and domestic work to achieve gender equality by 2030.
- Asia-Pacific Economic Cooperation. (APEC) 2022 Study: Shows that unpaid work contributes 9% to APEC member economies’ GDP, valued at $11 trillion.
- Cross-Country Estimates: Indira Hirway estimates unpaid work to contribute between 10%-60% of GDP in various countries, with 41.3% in Australia and 5.5% in Thailand.
- Examples from Canada and South Africa: In 2019, unpaid work accounted for 25.2%-37.2% of Canada’s GDP, while it ranged from 14.6%-38.1% in South Africa in 2010.
Economic Value of Unpaid Work in India
- Contribution to GDP: Unpaid work in India accounts for ₹22.7 lakh crore or approximately 7.5% of GDP.
- Women’s Share: Women perform the bulk of unpaid work, spending 36 hours weekly compared to 16 hours for men.
- Potential Economic Impact: Increasing women’s participation in the workforce could potentially boost India’s GDP by 27%.
- Impact of Recognition: Valuing unpaid work can enhance women’s labour force participation and promote gender equity in the economy.
Wage Variations in Calculating Monetary Value
- Opportunity Cost Method: Values unpaid work based on forgone wages of unskilled labour, focusing on what individuals could earn if engaged in paid work.
- Replacement Cost Method: Assigns value based on market wages for comparable tasks (e.g., cooking valued at kitchen helper’s wage, caregiving at nursing assistant’s rate).
- Estimates of Value: In 2019–20, the value of unpaid work was ₹49.5 lakh crore (GOC) and ₹65.1 lakh crore(RCM), or 24.6% and 32.4% of nominal GDP.
- Pandemic Impact: During 2020-21, unpaid work’s share of GDP rose to 27.2% (GOC) and 42.3% (RCM) due to increased household demands.
Policy Implications and Recommendations
- Gender-Equitable Policy Reforms: Policies must recognize unpaid work in economic indicators to foster gender equity in labour statistics.
- Impact of COVID-19: The pandemic highlighted disparities, as household contributions increased, emphasizing the need for policies addressing these imbalances.
- Further Research: Refining methodologies and promoting equitable care distribution are essential steps to boost women’s workforce participation.
- Economic Growth Potential: Recognizing unpaid work can unlock significant economic growth, particularly in low and middle-income countries.
Conclusion
Unpaid care and domestic work, predominantly performed by women, constitutes a substantial portion of India’s economy. Recognizing this invisible labour through refined valuation methods and policy changes can promote gender equity and increase women’s participation in the workforce. Addressing the challenges of unpaid work aligns with global goals and could potentially enhance India’s GDP, contributing to a more balanced and inclusive economic framework.
Related PYQ
Distinguish between ‘care economy’ and ‘monetized economy’. How can care economy be brought into monetized economy through women empowerment? [ UPSC Civil Services Exam – Mains 2023]
Practice Question
Discuss the economic significance of recognizing unpaid care work in India. Identify challenges in its valuation and suggest policy measures for equitable inclusion in economic indicators? [250 words]
Guidelines for Answering the Question:
- Introduction:
- Define unpaid care work and its role in supporting both households and the broader economy.
- Highlight its exclusion from GDP calculations despite substantial contributions to societal welfare.
- Body:
- Explain its substantial but hidden impact on GDP and workforce support.
- Emphasize how recognizing unpaid work aligns with SDG 5 on gender equality.
- Discuss its potential to enhance female workforce participation and overall productivity.
- Describe valuation methods like Opportunity Cost and Replacement Cost, along with associated limitations.
- Mention infrequent data collection (e.g., Time Use Surveys) and cultural biases.
- Address the difficulty in quantifying non-market activities.
- Suggest regular time-use surveys and comprehensive data collection.
- Advocate for tax benefits or social security for caregivers.
- Recommend gender-sensitive policies in economic planning to bridge these gaps.
- Conclusion:
- Summarize the need for recognizing unpaid work for a balanced economy.
- State that equitable policies can drive inclusive growth and gender equity in India’s economic landscape.