Association for Public Policy Analysis & Management

Background: Domestic workers are one of the most vulnerable workers in the U.S. economy; they are mostly minority and immigrant women working within someone's homes providing childcare, elderly care, and housekeeping services. Because domestic work is seen as unskilled housework and care-giving work that women traditionally carry out unpaid for their families, it is invisible and extremely poorly compensated. What adds to this labor market inequality is that a substantial share of domestic workers is employed informally outside of state regulations. During recent decades, local efforts have been underway to up-skill and professionalize some domestic workers and also to enact state-level Domestic Workers Bills of Rights to protect them from labor market violations.

Purpose: The purpose of this study was to estimate labor market penalties experienced by domestic workers (housekeepers, childcare workers, home care aides, and home health aides). More specifically, it aimed to examine how the penalties that domestic workers experienced in limited hours of work and earnings are explained by (1) domestic worker status (working at private homes), (2) employment formality, (3) occupational credential holding, (4) variation in state-level labor policies (domestic workers bill of rights and minimum wages).

Methods: The data for this study came from the Annual Social and Economic Supplement to the Current Population Survey of 2017 and 2018. A total of 5,864 workers who worked as housekeepers, childcare workers, home care workers, and home health aides were identified and categorized by their domestic worker status (working at private homes vs. care facilities) and employment formality (directly hired by private households, hired by private agencies, or self-employed without any employees). Occupation-specific analyses were conducted to examine penalties in work hours and earnings associated with domestic worker status and employment formality while controlling for the effects of demographic vulnerabilities, occupational credentials, and state variations in minimum wage laws and enactment of Domestic Workers Bill of Rights.

Findings: Substantial shares of all housekeepers, childcare workers, and home care workers were directly hired by private households, and except for housekeepers, the rates of occupational credential holding were considerable among the workers (from 15% to 45%). Domestic worker status was associated with work hour premiums for childcare workers but work hour penalties for the rest of the workers. Home health aides who were domestic workers had a 5% earnings penalty compared to their counterparts who worked at care facilities, but earnings penalties for the rest disappeared when differences in the hours of work, demographic vulnerabilities, occupational credential holding, and state variations were controlled for. For home care aides who were domestic workers, occupational credential holding was associated with a 1.3% earnings penalty when it was associated with an earnings premium for their non-domestic counterparts.

Implications: Labor market penalties associated with domestic worker status and employment formality differ by domestic worker's occupation. Findings suggest that some domestic workers informally employed do not benefit from earnings premiums associated with occupational credential holding. Implications for federal and state labor and welfare policies as well as household employer practices are discussed.