An Assessment of the Input Approach to Estimate Household Childcare the case of Plymouth, UK

Abstract

One of the major limitations of the Gross Domestic Production (GDP) is its failure to record non-market transactions. Household childcare constitutes one of such transactions which are omitted in the GDP measure. Since 2003, an attempt has been made to account for this in the UK, on an experimental basis, in the Household Satellite Accounts (HHSA), using an output valuation approach. This study tests the application of the input replacement cost approach to estimate household childcare and its unreported contribution to GDP in the UK. A multi-method approach was used consisting of primary time-use diaries completion and in-depth interviews conducted in selected areas in Plymouth. This was supplemented with UK’s Time Use Survey 2000 data evaluated at present day values, to improve representativeness of the results. Sampled households are families of married or co-habitant couples with children aged <15 years. Results at the micro-level show that, the cost of household childcare is £17-23 thousand a year per household and 37-38% of this cost is devoted to talk-based developmental activities. Families spend an average of 7-9 hours per day on childcare activities, with longer time spent during weekend days and in households with more children. A multiple-childcare arrangement model is found to be adopted by the studied families influenced by factors such as: child’s interests, parents’ employment, parent’s opinions of paid care, the high cost of institutional care and the availability of grandparents’ help. In addition, the strong relationship between mother’s employment and childcare settings has been confirmed. At the macro level, the estimated contribution of the monetary value of household childcare is found to be 9.1-12.13% of 4 the UK’s GDP. Policy implications include improvements in employment policies enhancing flexible working conditions, longer maternity and paternity leave, and part time jobs; improved recognition of unpaid child carers and the nationwide development of advisory services that reach wider numbers of parents. This study also recommends research investigating factors influencing the time and cost of household childcare (e.g., ethnicity, religion, etc.), the employment of input approach in the UK’s HHSA, and continuation of the UK Time-use Survey in the future to capture any changes taking place.