Rethinking paid domestic services in modern societies – Experimental evidence on the effect of quality and professionalisation on service demand

Purpose Although essential to social welfare, unpaid domestic and care work is an increasingly scarce resource in modern societies. Despite the growing need, many households refrain from outsourcing their domestic chores to the market. Simultaneously, the household service sector is mostly characterised by low-qualification, informal jobs lacking quality and professional standards. Drawing on transaction cost theory, the present study aims to examine how trust problems deriving from the quality and professionalisation of domestic services can be overcome by also exploring the role of state subsidies in this context. Design/methodology/approach A factorial survey experiment in Germany ( N = 4024) causally explores the effect of state-subsidised service vouchers, quality signals and professionalisation on preferences and willingness-to-pay for domestic services. The data were analysed using multilevel modelling techniques. Findings Hypotheses are mostly confirmed: strong quality signals help overcome trust problems, thus facilitating the demand for household services. Further, service vouchers can generate better pay for domestic workers while simultaneously reducing the costs for households. Research limitations/implications The relevance of professionalisation and quality of service as important determinants of domestic service demand is revealed. However, the experimental survey design involves hypothetical scenarios. Originality/value The analysis offers insights into how to stimulate demand for household services and increase formal employment in a sector currently largely characterised by informal arrangements. It further shows how social policies can help secure quality and foster professionalisation by shifting paid domestic work from the informal to the formal economy.