A short review of Nancy Folbre, Valuing Domestic Product New York Term Paper

A short review of Nancy Folbre, Valuing Domestic Product New York Times, May 28, 2012 - Term Paper Example One of its major points is the significant economic effects of domestic work to the economy. This is because the unpaid domestic workers offers a supplementary role to the employed member of households, roles that would have been paid for if they were for example taken over by a house help. The article illustrates this with the example of marrying a paid worker thereby ceasing to pay. This will reduce the gross domestic product while a divorce in the arrangement to effect payments for the services would increase the gross domestic product. This identifies the significance of unpaid domestic work to the gross domestic product (Folbre, 2012). Another identified issue in the article is the undervaluation of the value of unpaid domestic works. One of the reasons for the underestimation of the unpaid domestic work is its equivalent rating with average rate for commercial household workers. The difference in family based skills, and probably self-interest in the unpaid domestic work, howev er illustrates a higher value for the unpaid work. As a result, published estimates are less than the actual value of unpaid domestic work. ... Similarly, those who still dedicate to it have a reduced invested time in the work. The reason for such reduced time is the technological developments that provide time efficiencies and cheaper substitutes. These have also led to loss of significance of unpaid domestic work (Folbre, 2012). The article also explains the role of homemakers, as unpaid domestic workers, as social and economic equalizers. This is because their shift from the domestic chores into paid works leads to a significant difference across households a factor because of the less volatility in the value of domestic chores as compared to employment opportunities (Folbre, 2012). Why full time homemakers are income equalizers Full time homemakers are income equalizers because the value of domestic roles and domestically generated products are less volatile that the value in employment opportunities and market products. This means that the homemakers generate almost equal utility levels to harmonize the differences from the breadwinners’ market income. The transition from full time homemakers to the employment market however increases wage rate inequality. Similarly, the shift from a full time homemaker into an employee means that market products whose values are highly volatile substitute the almost uniformly valued domestically produced products. The volatility factor that is less significant in domestic roles than in the market therefore explains the role of full time homemakers as income equalizers (Folbre, 2012). Unpaid household work in Canada The value of unpaid household work in Canada is estimated to fall within the range of between 35 percent and 55 percent of the country’s gross domestic product (Perelman, 2011).