In the realm of economic analysis, income and spending are the primary metrics for gauging inequality. However, an often-overlooked component is unpaid labor, which encompasses tasks such as home-cooked meals, child care, house cleaning, and lawn maintenance. This unpaid work represents a significant portion of the services families consume but is absent from traditional economic measures.
Economists focused on caregiving and inequality have explored how including unpaid labor in economic assessments could alter perceptions of inequality in American living standards. Their study, published in the Journal of Public Economics in March 2026, evaluated the monetary value of unpaid household work and child care. By integrating these values into conventional income and spending metrics from 1965 to 2018, they introduced the concepts of “extended income” and “extended consumption.”
The research revealed that unpaid labor used to mitigate inequality significantly by providing essential services. However, this buffering effect has diminished over the past five decades, indicating a more pronounced inequality in living standards than traditional data suggests.
The Impact of Unpaid Labor on Inequality
Consider two families with different financial situations. Both families have two adults and two children, but their income varies. One family has two earners with a total income of $150,000, while the other relies on a single breadwinner earning $110,000, with a stay-at-home spouse contributing 45 unpaid work hours weekly.
Valuing each hour of unpaid labor at $17, the standard wage for a housekeeper, this unpaid work amounts to approximately $39,780 annually. When this value is added to their income, the financial gap between the families narrows from $40,000 to just $220.
Extended income, which includes both paycheck earnings and the value of self-conducted household tasks, tends to be more evenly distributed than earned income. This is because both affluent and less affluent families dedicate similar amounts of time to home chores and child care.
The Decline of Unpaid Labor’s Role
Despite the initial equalizing effect of unpaid labor, its role in narrowing the income gap has been decreasing. From 1965 to 2018, the average time Americans spent on unpaid household tasks decreased. This shift was mainly due to a reduction in women’s average unpaid work hours, which fell from 37 to 24 per week. Meanwhile, men slightly increased their unpaid work hours from 12 to 15 weekly.
The study did not investigate the reasons behind the decline in unpaid labor hours, but potential factors include the significant rise in women’s employment and the advent of time-saving devices like dishwashers.
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Impacts on Low-Income Families
The study utilized data from the American Heritage Time Use Study, the Current Population Survey, and the Consumer Expenditure Survey to analyze these trends. Each hour of unpaid labor was given a monetary value equivalent to that year’s typical housekeeper wage.
Low-income households were most affected by the decline in unpaid labor, as it comprised a more substantial portion of their total income. From 1965 to 2018, the income disparity between the wealthiest and poorest households increased by about 40% using conventional metrics. However, when unpaid labor was included, this disparity grew by 66%. Similarly, household spending inequality rose by 18% after factoring in unpaid work.
Overall, while the typical U.S. family’s extended income increased by 40% from 1965 to 2018, this growth was slower than the 69% increase in income from paid employment during the same period.
Who Suffers the Most
Standard economic data suggest that the gap between middle-income and low-income households has remained stable over time. However, incorporating unpaid labor shows a different picture: the gap has widened considerably.
Single-parent families, primarily led by single mothers, experienced sharp rises in paid employment income but saw significant declines in the value of their unpaid domestic work. Although they could afford more goods and services, the inclusion of unpaid labor revealed no relative improvement compared to married parents.
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The Broader Implications
The increase in women participating in the workforce over the last 60 years has been driven by greater opportunities and economic necessity. While this shift has brought significant economic benefits to women and their families, it has also resulted in the loss of the unpaid services women used to provide at home, particularly impacting low-income families.
The study’s findings indicate that examining only income and spending changes can exaggerate perceived improvements in living standards for the lowest-income Americans over the past five decades.
As families perform fewer household chores, they often pay others to do them, increasing their expenses. Otherwise, they must adjust to having fewer services than they previously did.
