Workshop on Measuring Household Production, IATUR 2014 Conference, Turku 29 July 2014

1. Calculating the value of labour
Kristiina Aalto
IATUR Workshop, Turku, July 29, 2014

2. Outline/Structure
Value of labour =
Amount of time spent on domestic work * hourly wage
• (Definition of domestic work)
• Time consept
• Wage consept

3. 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

4. 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)

5. 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

6. 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

7. Household production or not – and if yes, in which
function?
7
Action No
HHP
HHP
Housing
Meals
Clothing
Care
Voluntary
work
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

8. 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

9. 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

10. 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

11. 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)

12. Working time concept
• Paid working time includes holidays, sick leaves, and
daily coffee breaks...
• Data from time use surveys include only actual
working time

13. Summary
Value of labour =
Amount of time spent on domestic work * hourly
wage

14. Thank you!
email: kristiina.aalto@ncrc.fi
www.ncrc.fi