THE HOUSEHOLD ECONOMY AND COPING STRATEGIES
To understand the mechanisms by which coping poor urban households survive, it is necessary to complement macro-scale neo-classical economic analysis of the Third World urban economy with detailed consideration at the micro-scale of the household economy. In Friedmann's (1992) model of the whole economy the household is seen as the basic economic unit-a miniature political economy that makes decisions on a continuing daily basis concerning the best use of available resources 8 (Figure 24.3)
Within this framework, households have three sources of monetary income, deriving respectively from formal work, informal work and net intra- family transfers. The first two are part of the market economy and the third is part of the moral econ- omy. The total amount of disposable income (indi- cated by in Figure 24.3) may be reduced by taxes
(some of which may be returned to the household via public transfers such as health care) and by cap- ital expenditure to support infor production. The household also has a moral obligation to make income transfers to non-household family (e.g. to support a new migrant to the city), although these may be reciprocated at a future time. In addition to money income, the household's livelihood also depends on in-kind contributions from domestic and communal work. Although not represented explicitly in the model, in many low-income com munities informal financial systems, such as rotat- ing credit associations, can also play an important role in the household economy"
The model identifies three kinds of household expenditure:
l. for consumption proper, such as food;
2. for investment in household durables, e.g. hous- ing (H&DG);
3. for investment in human resources, eg. the education of children (HR).
Expenditures also include time inputs to domestic work (D) such as shopping, cooking, cleaning, nur- ing, child-rearing, construction and repair, water and firewood collection, and vegetable gardening, and to productive activities within the neighbour- hood or community economy (CE), including the construction of schools, making improvements to roads and the distribution of hot meals to the destitute.
The whole-economy model enables us to trace changes in household coping strategies in response to changes in internal (e.g. illness, birth, death) or external (e.g. job loss) circumstances. In times 0 prolonged economic crisis:
l. Women may enter the labour force (at lower rates of pay than men) or start to engage in
THE HOUSEHOLD ECONOMY AND COPING STRATEGIES
To understand the mechanisms by which coping poor urban households survive, it is necessary to complement macro-scale neo-classical economic analysis of the Third World urban economy with detailed consideration at the micro-scale of the household economy. In Friedmann's (1992) model of the whole economy the household is seen as the basic economic unit-a miniature political economy that makes decisions on a continuing daily basis concerning the best use of available resources 8 (Figure 24.3)
Within this framework, households have three sources of monetary income, deriving respectively from formal work, informal work and net intra- family transfers. The first two are part of the market economy and the third is part of the moral econ- omy. The total amount of disposable income (indi- cated by in Figure 24.3) may be reduced by taxes
(some of which may be returned to the household via public transfers such as health care) and by cap- ital expenditure to support infor production. The household also has a moral obligation to make income transfers to non-household family (e.g. to support a new migrant to the city), although these may be reciprocated at a future time. In addition to money income, the household's livelihood also depends on in-kind contributions from domestic and communal work. Although not represented explicitly in the model, in many low-income com munities informal financial systems, such as rotat- ing credit associations, can also play an important role in the household economy"
The model identifies three kinds of household expenditure:
l. for consumption proper, such as food;
2. for investment in household durables, e.g. hous- ing (H&DG);
3. for investment in human resources, eg. the education of children (HR).
Expenditures also include time inputs to domestic work (D) such as shopping, cooking, cleaning, nur- ing, child-rearing, construction and repair, water and firewood collection, and vegetable gardening, and to productive activities within the neighbour- hood or community economy (CE), including the construction of schools, making improvements to roads and the distribution of hot meals to the destitute.
The whole-economy model enables us to trace changes in household coping strategies in response to changes in internal (e.g. illness, birth, death) or external (e.g. job loss) circumstances. In times 0 prolonged economic crisis:
l. Women may enter the labour force (at lower rates of pay than men) or start to engage in
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