A Valuation of Childcare Provided by Parents in the United Kingdom:Inputs and outputsISER Internal Seminars

A recognised shortcoming of the present system of national accounting is the omission of non-market production from national accounts. Various attempts have been made to rectify this by developing measures of the monetary value of non-market production. This paper aims to estimate the monetary value of the childcare provided by households in the United Kingdom, exploiting a unique data source that contains information on the amount of time spent on childcare from two perspectives: that of parents, and that of children. Using this data it is possible to calculate the input into childcare by parents, and the output of care measured in terms of the time each child records being in the presence of, or at the same location as a parent. Information about children aged 0 – 7 years is not available directly. Following previous studies it was decided to make an assumption about the age at which no child was unsupervised. The assumption made was that children aged 0 – 4 years, were in the care of their parents for all the time a parent recorded being co-present with a child. For children aged 5 – 7 the ratio of output to input was imputed based on information available directly from the ratios that could be computed for children aged 8 – 13 years, basically assuming that this ratio would be higher for younger children but not equal to one. With these assumptions and imputations, combined with the available data it was possible to compute the output of care for all children aged 0 -13 years.

Having quantified the input and output of care, prices are assigned to get the valuation. The input method uses an experimental methodology developed by Folbre & Yoon (2006) whereby a spectrum of care intensity is defined and appropriate replacement prices are assigned to different points on the spectrum. For the output method, a number of prices were chosen, using data available on the prices UK childminders charge. In addition to this, a valuation of the output is presented, where the prices that are assigned to the output of care are adjusted using a weight constructed from the data, which considers different levels and types of interaction between parents and children. The ultimate effect of the weight is to depress the value of the output for older children. A higher proportion of the time that older children are around their parents is time when they are at the same location as those parents, but not directly interacting with them. The output measure is therefore calculated in three ways: including this time at the same location, excluding it, and finally including it but adjusting the price assigned using the weight.

Valued using the input measure, childcare produced in households represents about 16% of GDP (2005). The aggregate value of the output varies depending on the price assigned, and also whether location is excluded, included (unadjusted) or included (adjusted). The output measure approximates the input measure if the highest price is assigned, and adjusted to weight location less relative to more intense levels of care. The research shows clearly that with appropriate time use data, childcare, which is quantitatively and qualitatively one of the most important of household products, can be properly measured: both inputs and outputs.

Presented by:

Killian Mullan (ISER)

Date & time:

11 Apr 2007 12:00 pm - 10 Apr 2007 23:00 pm


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