PHS policies - Implementation and monitoring guide

Household demand is below its potential


As indicated in the previous section, several trends tend to increase the need for PHS. However, there are several obstacles that explain why households do not externalise more to formal service providers:

  • Without supporting policies, the price in the formal market might be too high for consumers, especially given that households do not take into account the positive externalities (see next point) related to their use of PHS.
  • In some countries, cultural barriers exist that prevent, , the outsourcing of domestic work. For example, there may be a lack of social acceptance with regard to externalising PHS, or difficulties with accepting an unknown person into the home.
  • An additional difficulty could be the accessibility of these services. Indeed, some countries may have few services providers and/or the services providers may not be spread equally across the territory, which could mean that some households have difficulty accessing services.
  • Another difficulty is the issue of unobserved quality, quality uncertainty and a lack of quality guarantee. Indeed, when no formal scheme guarantees a given level of quality and reliability of the services provided, this might stop the household from making use of the services.
  • Finally, a last limitation is the difficulty in assuming the role of employer. Indeed, as stated by Gregson and Lowe (1994), employing a cleaner is not an “assumed, automatic or accepted social practice” (Orseu, 2013).