Domestic work and the shadow economy

A study of domestic work in Portugal examines the evolution of the sector during the first decade of the 21st century. Data suggest a considerable increase in both the levels and the informal nature of domestic work and, with a rising proportion of the sector staffed by foreign nationals, in its ethnicity. The report argues that the combination of a lack of social protection and employment flexibility in the sector is leading to a reversal of the trend towards growing formalisation that characterised domestic service at the beginning of the decade.

Background

A study into undeclared work in the domestic sector, In the depth of the shadows: domestic work, gender and immigration (in Portuguese, 443KB PDF), has been published by the School of Economics and Management at the Technical University of Lisbon (ISEG-UTL). The study, based on doctoral research, focuses on paid domestic work in the first decade of the 21st century in Portugal.

The research used a quantitative methodology, based on the analysis of available quarterly data from the Labour Force Survey of Statistics Portugal (INE) and data from the registers of the Ministry of Solidarity and Social Security.

Key findings

The number of people working in domestic services decreased from 153,600 in 2000 to 144,000 in 2010, a decrease of 9,600 (-6.25%). However, the decrease was not linear during this period; there was actually an increase of 16.3% between 2005 and 2008, followed by a significant decrease of 17.9% up to the end of the period of study. By 2010, there were 31,500 fewer domestic workers than in 2008.

A comparative analysis by gender shows the vast difference between the number of men and women in domestic service (Table 1). While the proportion of women among the domestic service labour force is significantly high and remains constant (above 98% in most years), the number of men in the group is almost non-existent.

Table 1: Domestic workers, 2000–2010 (thousands)
 

Total

Men

Women

% women

2000

153.6

1.8

151.8

98.8

2001

144.8

1.6

143.2

98.9

2002

152.2

1.8

150.4

98.8

2003

161.6

3.4

158.2

97.9

2004

151.5

2.8

148.7

98.2

2005

150.9

1.7

149.2

98.9

2006

152.4

2.2

150.2

98.6

2007

167.5

2.4

165.1

98.6

2008

175.5

2.1

173.4

98.8

2009

149.8

0.7

149.1

99.5

2010

144.0

2.4

141.6

98.3

Source: Abrantes, 2012, Table 1

Figure 1 shows that, compared with the decrease in total employment in Portugal over the period of study, with values being very close to zero between 2002 and 2008, the growth of employment in domestic services before the economic crisis and its contraction in the latter years is evident. In 2009, the percentage of domestic workers dropped sharply by almost 15%.

Figure 1: Yearly increase/decrease in domestic workers and of the total employed population, 2000–2010 (%)

Figure 1: Yearly increase/decrease in domestic workers and in the total employed population, 2000–2010 (%)

Source: Abrantes, 2012, Figure 1

In 2000, 85,000 domestic workers reported that they worked on a part-time basis, compared to 67,000 working on a full-time basis. Over the years, this gap has narrowed, and in 2010 there were fewer part-time domestic workers and more full-time domestic workers. The economic crisis seems to have affected part-time workers more than full-time workers. This is probably associated with the need for many people to work longer hours to increase their income.

According to the literature, full-time work is the most common modality for the recruitment of immigrant women, especially to live and work within the employers’ home (Catarino and Oso, 2000; Wall and Nunes, 2010; Guibentif, 2011; in Abrantes, 2012, p. 99). Their recruitment is more associated with care of children and the elderly, and with families with higher financial capacity. By contrast, part-time work is more common among women who do domestic work to supplement other sources of income.

Figure 2: Domestic workers, by working time, 2000–2010 (thousands)

Figure 2: Domestic workers, by working time, 2000–2010 (thousands)

Source: Abrantes, 2012, Figure 2

The number of domestic workers with open-ended contracts rose up to 2008, when this trend was reversed, with a reduction from 139,000 in 2008 to 109,000. This means there were 30,000 fewer domestic workers in 2010 than in 2008.

Figure 3: Domestic workers by type of work contract, 2000–2010 (thousands)

Figure 3: Domestic workers by type of work contract, 2000–2010 (thousands)

Note: ‘Other contract’ includes fixed-term contracts, seasonal work, occasional work and service provision (as self-employed).

Source: Abrantes, 2012, Figure 3

Social security data show that the number of people working in domestic service who had made contributions sharply declined after 2002. In 2010, this number had decreased to approximately 130,000. However, the number of domestic workers did not follow this downward trend, which may indicate the presence of an informal economy.

Figure 4: Domestic workers making social security contributions, 2000–2010 (thousands)

Figure 4: Domestic workers making social security contributions, 2000–2010 (thousands)

Source: Abrantes, 2012, Figure 4

According to INE statistics, in 2010 the number of foreign workers employed in domestic services was 20,000. This represents 14.2% of the total number employed in this activity.

Data from Table 2 show a significant difference in the pattern of social security contributions made by Portuguese and foreign domestic service workers. Portuguese domestic service workers making contributions numbered 17,500 fewer than the estimated number of Portuguese workers employed in the sector in 2010. The number of foreign workers making contributions in 2010 exceeded by 1,000 the estimated numbers of foreign workers in domestic service.

Table 2: Domestic service workers making social security contributions, by nationality, 2010 (thousands)
 

Employed in domestic service

Making contributions

 

N (1,000)

%

N (1,000)

%

Portuguese

123.6

85.8

106.1

83.1

Foreign

20.4

14.2

21.5

16.9

Total

144.0

100.0

127.6

100.0

Note: N = number.

Source: Abrantes, 2012, Table 2

Social security contributions

This discrepancy between the number of employed people and the number of people making contributions to social security is due to the fact that administrative records comprise absolute numbers of individuals. But the Labour Force Survey is a sample survey and its estimates are based on a questionnaire applied to a representative set of the total population. Additionally, it should be taken into consideration that informal workers (even irregular migrants) can contribute to the social security system, above all because such contribution is one of the requirements that formalises their employment relationship.

The social security database shows the number of people who made at least one monthly contribution in the category of domestic service during each year. The Labour Force Survey’s figures show the share of people whose ‘main occupation’ falls into the category of ‘activities of households as employers of domestic personnel’ based on NACE classifications. Therefore, it is possible that some people who make social security contributions are not classified as being in the sector in the Labour Force Survey.

This may also be the case for people who combine several occupations or sources of income. The Labour Force Survey records the respondent’s ‘main occupation’. However, some workers for whom domestic service is not their ‘main occupation’ may in fact choose to be registered as such in the Social Security records, perhaps because the contributory rate is lower in this category than for standard wage-earners.

Finally, it is also possible to make one’s own contributions to the social security scheme for domestic service regardless of whether the contributor actually performs the work.

Data from Table 3 show that the decrease of contributions to social security was higher among Portuguese workers in the sector: in 2010 there were 57,300 fewer Portuguese domestic service contribution payers than in 2002.

Among foreign workers in the sector, there was an increase in the numbers paying contributions over the period, especially among the Brazilian population. In spite of this increase, the number of foreigners paying contributions to social security for domestic service was still low in 2010, which points to the persistent informality of work in this sector.

Table 3: Domestic workers making social security contributions, by nationality, 2002–2010 (thousands)
  Portugal Brazil African Portuguese-speaking countries Eastern Europe Rest of EU Total

2002

163.4

1.9

3.4

2.4

0.7

172.523

2003

158.3

3.0

3.6

2.9

0.9

169.362

2004

145.4

4.2

3.5

3.1

1.2

157.987

2005

138.7

4.5

3.5

3.4

1.3

152.061

2006

127.2

4.6

3.4

3.3

1.3

140.352

2007

120.0

6.8

3.7

3.3

1.3

135.676

2008

120.4

10.7

4.2

3.9

1.4

141.326

2009

113.1

11.3

4.5

4.1

1.4

135.111

2010

106.1

10.2

4.7

4.3

1.4

127.598

Source: Abrantes, 2012, Table 3

Commentary

The statistical data analysed in this article sheds some light on the shadow economy in which paid domestic work is still performed. It paints a picture of increasingly intense and informal work in the decade between 2000 and 2010. The ethnicisation of the sector is becoming increasingly evident, with the growing presence of the Brazilian population in particular.

The lack of social protection is dramatic and rising, especially among Portuguese workers in the sector. The implications of this include the risk of poverty in the medium and long term, and questions over the sustainability of the social security system.

The study of paid domestic work requires a discussion on gender, immigration and the value of work, issues that are becoming more and more pressing in the current situation.

Reference

Abrantes, M. (2012), ‘A densidade da sombra: Trabalho doméstico, género e imigração’ [In the depth of the shadows: domestic work, gender and immigration] (in Portuguese, 443KB PDF), Sociologia, Problemas e Práticas [Sociology, Problems and Practices], No. 70, pp. 91–110.

Heloísa Perista and Paula Carrilho, CESIS

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