Editorial Comment:

Abstract: For households that take care of their children when working at home, the income earned from home-based employment is twofold. While visible money income is generated from the paid employment, there is a certain amount of invisible income generated from performing childcare at the same time. The purpose of this study was to estimate the invisible income generated from performing childcare when working at home, and its impact on household welfare change at both micro and macro levels. The results show that in 1988, for a typical home-based worker who took care of his/her children when working at home, the Hicksian compensating and the Hicksian equivalent variation were about $2564.53 and $1651.87 respectively. At the aggregate level, for the nine states included in this study, a point estimate of the total Hicksian equivalent variation was about 80.5 million. This means, if these households could not take care of their children when working 80.5 million dollars would need to be given to them in order to keep them as well off.