Household labor economic value calculation method: Comparison of replacement cost method and opportunity cost method

Housework refers to work done in the house to maintain the family life, such as cooking, laundry, cleaning, and caring for children and elderly parents. It is not captured in market statistics such as gross domestic product because it is not paid, but it is a necessary production activity for family and society to return.

“How much money does it cost to do household chores?“The questions are often asked in homemaking, family welfare, and women's studies assignments. This article summarizes how to calculate value and what issues to expect.

Why is housework so difficult to accept as work?

Housework is not traded in the marketplace, and is often seen as a love of family or a natural role. So even if I work all day, I still hear “play at home.” But if you leave the same work to a caregiver or housekeeper, it definitely costs money. In the sense that it is difficult for family members to work and rest outside without domestic work, domestic work serves a productive function that supports market labor.

Who does how much of the chores in the house leads to conflicts in the family, career breakdowns, and income gaps in old age, so it's a matter of weighing the economic plan of the family together.

How is the replacement cost method different from the opportunity cost method?

The key difference is that the replacement cost method is priced by the type of work, and the opportunity cost method is priced by the worker's abandoned income.

The replacement cost method seems fair by charging the same price if it is the same thing, but there is a limitation that the value can be small because the housekeeper's wage itself is low. The opportunity cost method has the problem that even if you cook the same dish, the value varies greatly depending on the person.

시험 준비는 일주일 전부터 조금씩 나눠서 하면 마음이 훨씬 편하더라고요. 문제를 풀 때 시간을 재면서 연습해 보는 것도 한번 챙겨보면 좋을 것 같아요.

What is the value of housework used for?

The valuation of housework is used to determine the amount of compensation for damages when a housewife is injured due to a traffic accident or to measure the contribution to the formation of property in divorce. Statistics Korea also estimates and publishes the value of unpaid domestic work separately. In addition, the discussion that housework takes place outside the market, leading to a career break for women and a labor market gap can be seen with labor market theory such as internal labor market theory.

Evaluation results vary greatly depending on the method and the baseline year, so it's important to identify sources and calculations together in your assignment.

What does it take to be valued?

Improvement measures include the culture of sharing housework with families, the expansion of parental leave and flexible work for men, social support for care work, the enrollment of full-time housewives in pensions, and the strengthening of old age security. There are also suggestions to increase the amount of time off to rest when you need family care. In the end, it is not a question of who does housework, but of how society as a whole is responsible for its value.

Assignment structure and reference materials

The report can be written in the order → of → appropriate measures in the area where the comparative → evaluation of the concept of housework and the → valuation method of the status of functional housework hours is used. For time and amount data, use the latest value of official data with the base year, such as the Statistics Korea Life Time Survey. Campus-style domestic work economic valuation data on page 8 outlining the current status of domestic work hours, alternative cost method, economic valuation according to the Opportunity Cost Act, and measures such as paid family leave can help you catch the flow of comparing evaluation methods for those preparing for family studies or family welfare assignments.