Technology,Social Innovation,and the Informal Economy

Abstract

Unpaid work in the home is an important contributor to national wealth: very nearly half of all work in a modern economy takes place outside the formal economy. A major effect of new technology is to increase the extent of informal production through the development of new productive equipment for installation in private households. Domestic production becomes more efficient, and the pattern of demand for commodities from the formal economy is changed: we buy goods rather than services. This article uses evidence about historical changes in the patterns of use of time, from a number of different developed countries, to investigate the effect of technical change on the relationship between the formal and informal economies.

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References

1. Stuart Henry , The Hidden Economy (Oxford: Martin Robertson, 1978).

2. Louis A. Ferman and Louise E. Berndt , “The Irregular Economy,” in Can I Have It in Cash? ed. S. Henry (London: Astragal, 1981).

3. Scott Burns , The Household Economy (Boston: Beacon Press, 1977).

4. Jonathan I. Gershuny , After Industrial Society? (New York: Macmillan; Atlantic Highlands, NJ: Humanities Press, 1978).

5. Jonathan I. Gershuny , “The Informal Economy,” Futures, 11:1 (Feb. 1979).

6. Jonathan I. Gershuny , Social Innovation and the Division of Labour (New York: Oxford University Press, 1983).

7. The latter term is from Herbert C. Greenfield , Manpower and the Growth of Producer Service (New York: Columbia University Press, 1966).

8. Jonathan I. Gershuny and Ian D. Miles , The New Service Economy (London: Francis Pinter; New York: Praeger, 1983).

9. John P. Robinson , How Americans Use Time (New York: Praeger Scientific, 1977), provides a concise description of time budget techniques and their application in the United States.

10.

Jay I. Gershuny et al. , “Time Budgets: Preliminary Analyses of a National Survey,” Quarterly Journal of Social Affairs, 2(1): 13-39 (1986).

11.

11. The multinational comparative data set used is not properly documented in a published form, but a brief description will be found in Jonathan I. Gershuny , “Time Use, Technology and the Future of Work,” Journal of the Market Research Society, 28(4) (Oct. 1986). The estimates in Figures 2A, 2B, 4A, and 4B have been reweighted so as to remove the effects of increases in the proportions of employed women and unemployed men in the national samples. Note the increase in men's domestic work in figure 2B reflecting, we might guess, cultural rather than technological change.

12.

12. This process of translation is a nontrivial task, requiring an intricate sequence of calculations that I shall not attempt to outline here; the general principle is nevertheless quite straightforward, and the set of associations in Table 1 is really the only unconventional aspect of it.