Academic journal article Journal of Forensic Economics

Back to Becker: Valuing Women's Economic Contribution from Housework with Household Production Functions

Academic journal article Journal of Forensic Economics

Back to Becker: Valuing Women's Economic Contribution from Housework with Household Production Functions

Article excerpt

I. Introduction

As forensic economists are well aware, the death or injury of a productive family member results in a substantial economic loss to the remaining members of the household. The true value of that person to the surviving household members is, of course, immeasurable. However, it is that person's economic contribution to the household, from labor inside and outside of the home, with which the forensic economist is primarily concerned. Moreover, that person's economic contribution to the household from work outside of the home is easily quantifiable from employer records, tax filings or other data. But forensic economists continue to struggle with calculating the economic contribution from labor inside the home, or household production. Furthermore, women's economic contribution from household production is an especially relevant issue for forensic economists since--on average--it vastly exceeds that of men, even in single households.(1)

The forensic literature reveals three general approaches for valuing the economic contribution of work in the home. The first and most frequently cited approach encompasses all of the alternative "Wage Methods;" the second, more infrequent approach is the "Direct Output Method;" and the third approach--practically nonexistent in the forensic literature--involves the estimation of household production functions (or the "Value-Added Method"). As the purpose of this paper is to illustrate and advance the use of the value-added method, some characteristics and shortcomings of the first two methods are briefly discussed.

A. The Wage Methods

The majority of literature regarding the valuation of housework focuses on multiplying one of many alternative, often arbitrary, "wages" by the number of hours spent on household labor. Hawrylyshyn's (1976) frequently cited article provides a survey of the classic studies that have used this general approach, and a more updated comparison of these studies can be found in Goldschmidt-Clermont (1983). In the forensics literature, Douglass, Kenney and Miller (1990) nicely summarize some of these studies.

The problems associated with the housework wage methods are essentially threefold. First, there is the obvious problem of selecting an appropriate housework wage (Dulaney, Fitzgerald, Swenson, & Wicks, 1992). Some studies use the individual's foregone market wage (cf., Sirageldin, 1964; Nordhaus & Tobin, 1972), others use the average wage of persons engaged in domestic and personal service (cf., Mitchell, King, MacAulay & Knauth, 1921), while others use wages of individual market counterparts for each specific housework activity to value household labor task-by-task (cf., Gauger & Walker, 1980). In forensic practices, the selection of a housework wage is very subjective since definitive and objective criteria have yet to be established.

Second, the female's economic contribution from work in the home is the value of her household production, not the value of labor hours. Production in the home actually combines labor with capital and other resources, just as production in the business sector does (Gronau, 1980). Thus, even if objective criteria for a housework wage were established, the simple model where the wage is multiplied by housework hours neglects other important inputs and is not truly valuing the economic contribution from housework.

Third, housework wage methods do not take into consideration that household production often involves the production of leisure as well as physical goods and services. Given that "joint outputs" are being produced, multiplying housework hours by a housework wage may overstate the true monetary value of the service provided (Graham & Green, 1984; Quah, 1987). Nonetheless, despite the inherent problems with wage methods, they appear to be the dominant paradigm in forensic practices, perhaps because of their methodological simplicity and user flexibility. …

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