Stuart Birks, 21 July 1995
Referees' reports are included in full. My comments are in italics.
Referee A
Referee Report on "Women, Families and Unpaid Work"
This paper examines the topic of home production in New Zealand. The author motivates its importance by looking at the sheer magnitude of this production that doesn't show up in the GDP accounts, and the concerns that this production is systematically undervalued in society.
Not quite, I was motivated more by the publicity given to people such as Waring with their claims that economists think that housewives are "totally unproductive". They then use such claims to contend that women are unfairly treated and men are privileged in the current social order. The "sheer magnitude" of the production is evidenced by the estimates ECONOMISTS have made of its value. I was motivated more by the relative undervaluing of men's contributions and women's benefits apparent in the claims of feminist economists and others. I wonder if the referee is off track already.
The author focuses on a set of three questions that surround this general topic. These questions are addressed in the subsequent sections of the paper.
Major Comments:
The thrust of this paper seems to be the 3 questions which are posed on page 4:
· What non-monetary benefits do men receive from their spouses that 'compensate them for the hypothesised monetary transfers that go in the opposite direction?
· How much are men paying for these goods or services?
· Are they getting value for their money?
First, I don't like assuming away altruistic behaviour when it comes to resource allocation within the family, at least without some discussion about the implications of this strong assumption.
I would have thought that, given the nature of most economic theory, the default assumption would be that of no altruism, so that the need for justification arises in the case of inclusion of an altruism assumption, not its exclusion. This applies in particular for relations between spouses. In fact, my paper's findings stand with or without the presence of altruism, although an explanation of the analysis omitting altruism is easier in the first instance. Part of the referee's problem arises from a most unusual concept of altruism:
For example, if these transfers are taking place and family members are altruistic, no compensation is necessary.
This is quite amazing. THE REFEREE CONSIDERS ALTRUISM TO BE LIKE A BLANK CHEQUE. I am not sure what definition of altruism the referee is using, in that there may be the assumption that people benefit from other people's satisfaction, or that they enjoy giving, irrespective of any benefit to the recipients, or that they deliberately choose to accept a lower utility level than they could do. I am also not clear as to how two partners can both behave altruistically towards each other.
If we accept that some transfers may take place from one partner to another with nothing being given in return, that is still not sufficient to conclude that no compensation is ever necessary. To follow an equivalent line of reasoning to that of the referee, if a society is charitable, then ANY pattern of income redistribution through the tax and benefit system is acceptable. In reality, I suspect that altruistic feelings may lead some people to accept some degree of over- or under-payment, but presumably there are some levels that they would be unwilling to tolerate.
Nonetheless, what replaces it? Are we going to assume that the family unit itself is maximising utility, or that the spouses are maximising their individual utility subject to a set of budget constraints (i.e., game theory)?
I am not sure that this necessarily implies game theory, but I do not see why we should not assume that two decision makers have two minds and two sets of preferences. I would have thought that that would be an automatic starting point, but clearly the referee has a quite different perspective.
The reader needs to know what theoretical framework the author has in mind. THE KEY IS THAT THESE ALTERNATIVE THEORIES DON'T NECESSARILY IMPLY THAT MEN HAVE TO BE COMPENSATED FOR THE EXTRA TIME THEY SPEND IN MARKET WORK.
Is the referee saying that we may be living in a society where men are more altruistic than women? If this is so, shouldn't we be wary of dismantling the patriarchy? My point in the paper is different, however. I am considering the situation for individuals, but that seems appropriate in that they choose to form couples and choose to part (or at least one of them does). As economists, it would be most unusual for us not to consider the flows of money, goods and services between participants in a system. On the contrary, it is quite acceptable and appropriate to do so. As for a need for a theoretical framework, the more assumptions we make, the more restricted is the relevance of our findings. I take a very simple and general approach in the paper. First I identify relative contributions (no theory needed - it is a matter of observation), then I identify related financial flows (still no theory needed), and thirdly I consider the framework within which these flows are determined to see if they are flexible enough to allow attainment of desired outcomes (some theory of markets and regulations is applicable here). The assumptions required for the valuation method are spelled out in the second paragraph of section 3.
Second, why are we assuming that these transfers are taking place between working husbands and non-working wives? How can you look at the compensation they receive, without looking at the existence of these hypothesised transfers?
There is some truth in this, but I think that the problem is more imagined than real. I do discuss this point explicitly at the end of section 4. Granted monetary income may not be split exactly evenly, and granted the benefits of unpaid work may not be equally shared either, but I do not consider overall equality on average to be an intolerable assumption. Certainly it is an assumption underpinning the Matrimonial Property Act and its intent in the allocation of property on the end of a marriage. Also the Intra-Family Income Study, with which the referee is no doubt familiar and which is covered in the paper (note the reference to McKinlay and Easting, 1994), did not find any notable or systematic imbalances.
Third, and most importantly, this paper doesn't provide even tentative conclusions to these questions.
I think that the referee and I differ in our opinions on the relevance of and possible answers to the questions raised. I think that the importance placed on them arises from a misunderstanding of the issues and an overstatement of potential problems.
The rest of the paper makes little attempt to address these issues directly. Let me explain:
Section 1 is based on the first question. Yet, all the section does is summarise previous empirical work, which indicates that married women, on average, perform more unpaid house work than married men.
This misses the point completely, and it is section 2. The section shows that research which has been used to show how unfair the position of many women is and that many of them carry a "double burden" actually shows nothing of the kind. The referee is blind to important points about the total hours put in by men and women, and distortions in data that might arise as a result of performing several activities at once.
This is hardly a surprising conclusion. This has nothing to do with the issue of whether this constitutes adequate compensation for men. Nothing is presented that would provide a fresh perspective on this issue. In the end, we simply don't know if men are under or overcompensated (or for that matter whether any compensation is necessary or expected).
The reader is not expected to know if men are under- or over-compensated in a response to the question posed in section 2, as no attempt is made to identify how much men are paying until section 3. Is the referee really an economist???
Section 2 is based on the second question. The author says that past empirical work has attempted to estimate the value of this non-market work INDIRECTLY (by computing some shadow price to the time spent in home production). But, the author says "... THIS OVERLOOKS THE FACT THAT THIS WORK IS ACTUALLY BEING PAID FOR DIRECTLY IN THE AVERAGE HOUSEHOLD . . . ONE PARTNER EARNING MORE AND THE OTHER DOING MORE UNPAID WORK." This means that the author has now answered the first question by assertion (i.e., the respective burdens of spouses are identical). He simply assumes that the compensation received is 'just right'.
It is section 3, and I have to repeat, "Is the referee really an economist???" The fact that a price is paid does NOT automatically mean that the price is 'just right'. It is, however, unusual to totally disregard such information when trying to estimate a shadow price. I spend section 4 looking at the question of possible distortions in the pricing process.
The difference in time spent in home production (in favour of the wife) is set equal by assumption to the difference in MARKET EARNINGS (in favour of the husband).
This follows quite straightforwardly unless the referee assumes a systematic bias in the allocation of overall benefits from paid and unpaid work. I am not sure why such a bias is assumed. As for the internal consistency of my paper, I make this assumption explicitly on page 16.
As support for this proposition, the author turns to the MATRIMONIAL PROPERTY ACT 1976, which says that the partners evenly split after-tax household income.
... based on a presumption of equal contribution, as I quote in footnote 4.
This has nothing to do with the evaluation of home production, or support for the equation at the bottom of page 16.
It has everything to do with it.
(As an aside, I don't understand the need to 'scale' by the total unpaid work of the spouses).
Total value=(price per hour)x(total hours), as in PxQ. Note also the previous paragraph in the paper, where I point out that the equal contribution assumption could lead to apparently ridiculous results. Footnote 5 gives further explanation as to how results should be interpreted.
This equation says that if men and women receive the same earnings, the greater housework of women would be worthless!
So the referee sees that the Matrimonial Property Act (and presumably many marriages) can display some pretty ridiculous characteristics! We could of course fall back on the referee's altruism assumption and accept that women would be perfectly willing to perform extra unpaid work for no financial reward, and the outcome would be fair. (Incidentally, this unpaid work and housework are not synonymous.)
In fact, as the earnings gap narrows between the sexes over time, a constant difference in her greater contribution to home production would decline in value (while the opportunity cost of her time (her wage) increases). None of these problems with this approach are explored by the author.
No, I was wrong, the referee sees it all as my fault.
Why not assume that the difference in time spent in home production by the wife is equal to the difference in time spent in market work by the husband?
... because it would not show how much is being paid?
In any case, none of these problems arise in the indirect approach to evaluating the worth of home production. I'd stick to this earlier, conceptually better methodology.
I am measuring what is being paid, and even if I was trying to find some "true" value for home production, I fail to see how an approach that completely disregards these payments can be considered "conceptually better". The referee does not indicate which indirect approach is to be preferred, so I cannot be more specific in highlighting weaknesses. I suppose we are to simply concur.
Section 3 is based on the third question. Here the author doesn't even pretend to answer it. At least we agree that we simply don't know if husbands are getting value for their money. But then you have to ask why this question was raised in the first place. The author decides instead to make a number of assertions that are not backed up by either empirical or theoretical analysis.
It is section 4, and I state very clearly in the opening paragraph of the section that I take an indirect approach to the question by looking at the purchase decision and price setting mechanisms in the same way that analysts might look at market structure as an indicator of the appropriateness of resulting prices. I then proceed accordingly.
Minor Comments:
(Abstract) I found the opening paragraph of the Abstract confusing. The author seems to set up a 'straw man' in stating that " THERE ARE THOSE WHO WOULD CONTEND THAT A GREATER CONTRIBUTION BY ONE PARTNER THROUGH PAID WORK IS BALANCED BY A GREATER UNPAID CONTRIBUTION BY THE OTHER." Where does this come from? Is this the predicted outcome from a theoretical model? If so, it doesn't show up in the paper. Is it an empirical result found in the literature? If so, cite these articles. Is this a hypothesis of the current paper? If so, state it as a hypothesis and get rid of the ". . . THERE ARE THOSE WHO WOULD. . . " passage. As it stands, the statement just 'hangs' there without any support.
... except the quote in footnote 4. I would think that an assumption in an Act of Parliament on this matter gives strong enough justification for its inclusion.
I would prefer to see an abstract that clearly states what this paper intends to do. I'm also not sure where the issue of "...FAIRNESS..." was addressed in this paper.
It could have been spelled out more clearly.
(Page 1, Paragraph l) I found this paragraph to be unnecessary, and even misleading. It doesn't tell the reader what he or she wants to know, which is ' what is this paper going to do?' It seems that the author is going to examine some "... COMPETING THEORIES ...", but never examines any theoretical model(s).
It is misleading if it is misunderstood. I point out that there are many perspectives that we can take on any issue, that any one perspective can only give a partial explanation, but that the insights gained may be useful. I then state that the paper gives one perspective.
(Pages 1 and 2) The author consistently uses inferior data to make his opening points. For example, why rely on a weighted average of the midpoints of categories of weekly hours worked, when the actual means can be computed from Census data.
... because we are given numbers of people per category, not numbers of hours.
Moreover, the same averages could be computed from the HLFS, showing any changes over time.
The HLFS published data uses 10 hour groupings, as compared to the census's 5 hours, but there is a table in the 1994 publication (received after the paper was written) that gives actual averages overall for 1987-1994. This table indicates that the female/male ratio of hours worked is stable at about 75 percent, rather than the approximately 80 per cent that I used. My results are not dependent on these figures.
The same goes for the estimation of the effective years of lifetime employment for men and women, and the female-male wage ratio. Go to the original data source.
(Pages 20-26) This discussion on Superannuation and Child Support seems tangential to the main body of the paper.
On the contrary, they indicate that (i) a supposed 50-50 split may not be that in practice, and (ii) while claims can be made on the product of unpaid work during the marriage only, the results of paid work from before and possibly after the marriage may also be subject to transfer. If we are assessing what is paid for what, then this should not be overlooked.
Referee B
Report on Stuart Birks - "Women, Families and Unpaid Work"
This paper aims to discuss the allocation of time in the family.
That is one component of the paper.
This is an interesting topic which since the pioneering work by Gary Becker (e . g . "A Treatise on the Family", Harvard University Press, 2nd ed 1991) has attracted considerable interest among economists. A range of models have been developed, some using consumer demand theory, others game theory etc. (see e.g. A. Cigno, "Economics of the Family", Carendon Press, 1991).
As more micro-level data are becoming available in some countries through time-use surveys and expenditure surveys, we learn more about the trading that takes place within the household.
I note that the referee finds the concept of trading within a household acceptable.
However, the present paper makes no original contribution to either the theoretical or the empirical literature. It discusses some previously published statistics on labour supply and time use and then proceeds to discuss an implied value of unpaid work, the distribution of assets and the future monetary transfers after marriage dissolution in the context of unpaid work ( in itself a very interesting topic), without developing a formal framework to tackle this issue.
I have already addressed this point in relation to referee A's report. It appears that I am to make unduly restrictive assumptions about objective functions, etc., in order to be understood by these referees. Neither give any explanation as to why an approach which looks at actual contributions and rewards, followed by a specification of possible distortions and constraints on options which might influence the suitability of outcomes, is inadequate.
The style of the paper is also rather unusual, more aimed at the readership of a monthly magazine than a professional journal (the "entertainment value" is apparently important, see footnote 5 on p. 17) .
This comment relates to one possible interpretation or application of an approach. The entertainment aspect is not important, although I do not see why it is detrimental, and I explain that there are highly relevant reasons for the approach.
I also think that section headings such as "how much are men paying?" and particularly "are they getting value for money?" are offensive rather than helpful.
"How much are taxpayers paying for the public health system? Are they getting value for money? How much are taxpayers paying for the public education system? Are they getting value for money? ... " These are fundamental economic questions being asked with great seriousness, with the answers having a major impact in shaping policy and the future structure of our society. Why is someone who finds such questions offensive refereeing an article for an economic journal?
The only analytical contribution is a measure of the value of unpaid work based on the following argument: if a man and woman have equal earnings potential (say $30 per hour) and the man works 20 paid hours more per week than the woman, while the woman carries out 25 hours more of non-paid work, it is argued that the value of each hour of non-paid work is $30x20/25=$24 (formula p. 16) . But this means that if the man then reduces hours at the work place by 12 . 5 hours to divide the non-paid work evenly between himself and his partner, the value of this unpaid work increases to infinity! !
I do point that out. It is the implied value under those circumstances. Perhaps if there was a more general recognition of this, there would be fewer public statements to the effect that women are somehow disadvantaged if men do less than half the work in the home.
In reality, as any undergraduate student will know, the value of allocating scarce resources ( in this time and labour) to an activity such as homework is determined by the opportunity cost. At the margin, time is allocated such that the net marginal benefit across alternative uses is equalised (for a simple model, see e.g. D. Sapsford and Z. Tzannatos "The Economics of the Labour Market", Macmillan, 1993, pp. 50-51).
The referee is effectively asserting that the Matrimonial Property Act and any other place that advocates equal sharing between partners are inappropriate if the partners are not equally productive. I am not considering here any particular distribution as appropriate, but merely identifying the outcomes that arise and the possibility that the structures within which they are determined may not be flexible enough to prevent distortion or disadvantage. As for the second sentence, the referee must be careful not to confuse some theoretical "ideal" with the real world.
Some minor points:
p.4, line 5: "80 percent of the years" - this is only true if it is assumed that men work 100 percent of the years.
This is plainly wrong. For both men and women, I take into account both participation rates and unemployment rates. This is clearly stated in paragraph 4 of the paper.
p.4 6th line from the bottom: non-altruistic behaviour: altruistic behaviour can these days be incorporated in the analysis of household behaviour, see e . g . the new book by Oded Stark, "Altruism and Beyond: An Economic Analysis of Transfers and Exchanges within Families and Groups", Cambridge University Press, 1995.
It could also be reasonable in the presence of altruism - there is no reason why the benefits should only flow from men to women, for example. The issues are more clear-cut in the no altruism case, but having identified some measure of implicit prices associated with the distribution of work between partners, it is then for them to decide if the prices are appropriate. An altruistic partner would be willing to pay more.
p. 7: the paper ignores that some unpaid work is voluntary work carried out outside the home.
Why is this relevant in relation to exchange between partners?
With respect to the measurement of unpaid work, there is a 1992 Department of Statistics paper called "Options for the valuation of unpaid work in New Zealand ' .
There are several books and articles on this topic, including the Juster and Stafford JOURNAL OF ECONOMIC LITERATURE article cited in the paper, but my aim as clearly stated in the paper was to take a different approach. I note the reference, however.
p. 9: the numbers in brackets in Table 1 are not explained.
Fair point and my omission. They are standard deviations.
p.27: distortion (i): the flaw in the argument here is that it is assumed that when A earns twice as much as B, the allocation of time in the household is not affected.
I state that, "It is not clear that A would be getting any more than B". It may be that a woman marrying a high income earner would do more unpaid work than if she had married a low income earner, but conversely she is more likely to have the benefit of labour-saving devices and paid help in the home and with childcare. I do not think that a ceteris paribus assumption in the context of the point is out of order. The principle condition being emphasised is that the monetary price paid is determined by the person's income.
Referee C
Women, Families and Unpaid Work: Referee's Report.
It is encouraging to read a piece of work which challenges the NZ radical feminist critique of labour market economics within its own arena. The paper is interesting, because it does not attempt to value unpaid work in dollar terms and thus avoids the pitfalls of such an approach. Instead, the author views the welfare of the household as the "sum of values of paid and unpaid work" and therefore argues that the economic relationship of partners within that household is one which involves the exchange of hours of paid for unpaid work.
This referee has some understanding of what I have attempted to do, and can see the context in which it is set.
The main aim of the work seems to be to investigate which type of work undertaken in the partnership (and therefore which partner) contributes more to the economic relationship. Three sets of data are examined to demonstrate this exchange ratio in terms of partners with varying combinations of paid and unpaid work, e.g., a person in full-time paid work with a spouse in full-time unpaid work. The main findings seem to be that, overall, as one might expect, men do more paid work than women (and vice versa) but, more controversially, that men swap more than one paid hour of their own work for one unpaid hour of work from their wives.: "unpaid work is more valuable than paid work" (pl9).
Yes, it is controversial, which is most surprising in that data such as those used have been available for many years and consistently show this. Nevertheless those same data have been used to support claims that women are disadvantaged because, when they undertake paid work and thus increase their total hours worked, men experience little change in behaviour.
In view of this unfair exchange (combined with other factors), child support legislation and proposed reforms to superannuation arrangements on the termination of marriage or partnerships are deemed to be inequitable to men.
This is not quite correct. I do not say that the exchange is unfair, although I do conclude that the price paid does seem somewhat higher than might be expected. The relevance of the discussion on child support and superannuation is also misstated. The points being made are that, (i) "half" shares are not necessarily half shares in practice, and (ii) the results of paid work from OUTSIDE THE PERIOD OF THE MARRIAGE may also be incorporated into assets for sharing.
These are clearly interesting findings which should promote some discussion and further research. However, in its present form the article is not suitable for publication. First, the author ought to clearly state the focus of his/her paper, review critically (and briefly) the relevant literature in the area, and set up his/her own hypothesis as a challenge to existing work. This theory could then be tested by an examination of existing data, and policy implications for child support and superannuation discussed in the light of the results. Much of this information is available in the paper but the emergence of a clear and logical structure is not apparent. Moreover, the article is presented in a very verbose form and includes a great deal of irrelevant material; in particular, there is a naive and laboured approach to quantitative analysis where the use of simple tables is recommended.
These may well be appropriate comments. As to the last sentence, the paper was submitted on the understanding that issues of length, layout, etc., would be addressed later.
Second, even with severe pruning, it seems to me that the data sets are far too weak to test a hypothesis: For example, one is a pilot study, another an unpublished work; in one study "there are more than 24 hours in a day" (p11) in an analysis where hours (rather than dollars) are the crucial unit of measurement. As the results are likely to be the subject of debate, it is necessary to have access to a larger sample of more appropriate and accurate household details.
This comment is based on a misunderstanding. The "pilot study" was conducted by the Department of Statistics and comprised a sample of 418. The "unpublished work" is a reliable secondary source. The original information is taken from a publication from the Office of the Prime Minister and Cabinet, Australia, and is based on a larger sample than the New Zealand study. Ironically, the third data set, which was from a journal article and is not mentioned by the referee, is based on the smallest sample. The hours issue is crucial in identifying potential problems essentially in the overstatement of unpaid work. Given that these are the data sets that are commonly being used as a basis for research and policy recommendations, it is only appropriate that I also use them. When better data is available, it can be used. In the meantime, I do not see why my research should not be used when those whom, in the referees words, "I am challenging", do not face this same constraint. It should also be noted that the results of these surveys are consistent with other similar ones conducted in other countries.
Third, the policy implications which result seem to me to be based on theoretical weakness. Unpaid and paid work are not merely different categories of jobs which can be swapped in a simple system of current exchange because the unpaid work of one partner (at home) contributes to the future earnings of the paid worker by allowing the latter opportunities for skill acquisition. The unpaid worker foregoes his/her human capital investment for household welfare. On termination of the partnership contract, the paid worker takes from the marriage all of this investment which increases the welfare of his/her new household while the unpaid worker's welfare correspondingly diminishes. The point is that paid and unpaid work may be exchanged, but they are not perfect substitutes: the paid worker can undertake some home duties (or can hire help), but without opportunities for skill acquisition, the unpaid worker may find it difficult in finding paid employment. Consequently, when the partnership ends and respective individual welfares sought, the unpaid worker must rely on some income from the former partner in which his/her investment still remains.
This is clearly a personal view and is, in the referee's opinion, a justification for alimony. It is based on a very narrow view of the situation faced by the respective partners. Factors overlooked include:
i) the possibility that arrangements are voluntarily entered into;
ii) constraints on the income earner's career and other choices due to requirements of family, need for secure income, lack of opportunity to train, etc.;
iii) lack of opportunity for the income earner to develop certain unpaid work skills (so some unpaid work would either be done less well, or paid for - in which case taxes will be incurred);
iv) greater freedom for training, education, and paid work flexibility for the other partner (e.g. mothers of teenage children obtaining degrees);
v) costs for the income earner in terms of lower levels of participation in family life, less chance of custody of children, etc.;
vi) marriages may be short term;
vii) separated people may remarry, so the woman could continue using her existing skills and not be disadvantaged.
There are many people, feminists among them, who would disagree with the referee that alimony is an obvious requirement.
From my own viewpoint, I find these kinds of arguments very obvious and the use of economic theory in some areas of the social sciences, misplaced.
From my viewpoint, I think that these issues are very complicated, and no simplified approach emphasising only a few selected factors is going to be satisfactory. However, that does not mean that economics has no contribution to make. On the contrary, if the use of economics in such a significant area as this is "misplaced", how can it have any relevance at all?
Nevertheless, in fairness to this piece of work, it offers more insight and fewer value judgements than some other published articles I have seen which tackle similar issues. Perhaps the author should be encouraged to introduce human capital theory and the issue of lifetime returns and to seek more appropriate data.
While I would take issue with some of this referee's points, they are all valuable, and they do show some understanding of the material in the paper. For that, I am grateful.