Time Use among New Mothers, the Economic Value of Unpaid Care Work and Gender Aspects of Superannuation Tax Concessions

By Smith, Julie | Australian Journal of Labour Economics, June 2007 | Go to article overview

Time Use among New Mothers, the Economic Value of Unpaid Care Work and Gender Aspects of Superannuation Tax Concessions


Smith, Julie, Australian Journal of Labour Economics


Abstract

Population aging requires policies addressing 'population, participation and productivity'. By failing to acknowledge women's productive work in the unpaid care economy, current retirement income policies may reduce incentives to invest in children, the future labour force, and thereby heighten the economic task of addressing the aging problem.

A nationwide time use survey of new mothers conducted during 2005-06 highlights the time intensity of caring for infants, and its negative impact on women's current and future labour market earnings. Meanwhile, growing scientific evidence points to potential trade offs between infant health and development and full time maternal employment in the early months of life.

Time is an economic resource that may be allocated to non-market, as well as market, production. Women make substantial investments in human capital through unpaid work bearing and raising children. Current retirement income policies disadvantage and discriminate against this economic contribution in the non-market economy. This works against the national economic reform agenda which seeks to raise future labour productivity through quality early care of children and a healthier labour force.

1. Introduction

In the past two decades there has been a major policy preoccupation with addressing anticipated problems of an ageing population. Initially, policy settings around retirement incomes were altered substantially to reduce fiscal costs such as those of the public age pension. In more recent years, emphasis has shifted more appropriately to addressing broader economic implications of population aging, that is, to ensuring that economic participation and productivity growth provides sufficient resources to provide for an increased dependent population (Costello, 2007). Australia's system of flat rate, means tested age pensions is recognised to put Australia in a better position to deal with the fiscal consequences of ageing than many other OECD countries with earnings related public pension schemes. Thus, according to the Secretary of the Commonwealth Treasury, the effective response to the economic implications of Australia's aging problem lies in addressing 'population, participation and productivity' (Henry, 2004). Since 2005 there have been substantial increases in what is known as 'the Baby Bonus', targeting declining fertility. In 2006, the Council of Australian Governments (COAG) agreed on a national economic reform agenda which emphasised increasing labour force participation and workforce productivity (Council of Australian Governments (COAG), 2006). Female workforce participation in particular was to be increased. Governments also agreed to address issues such as early childhood development, and chronic disease burdens. This 'human capital' emphasis reflects concerns at the rising cost to the health system, to labour force participation and to productivity, of chronic disease. It also reflected growing evidence of the importance of children's early life experience for later life learning, labour force participation and productivity, and on the early life origins of chronic illness and disease.

Many studies in the past 20 years have shown that even attributing very low wage values ('replacement wage') to unpaid work, the unpaid economy of households contributes output worth at least 60 per cent of 'market' output measured as Gross Domestic Product (GDP) (Smith, 1982; Australian Bureau of Statistics, 1990 and Australian Bureau of Statistics, 1992). Much of this is accounted for by household's provision of unpaid child care. It has been shown that the number of unpaid hours of childcare far exceeds the hours worked in any other market or non market industry (Ironmonger, 2004).

Yet missing from Australia's population aging policies seems to be an understanding of interactions between the market (paid) and unpaid economies. There also appears to be lack of awareness of the implicit social contract and social institutions and arrangements whereby dilemmas of care provision have been addressed in the past. …

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