Feminist economists argue for the primary importance of unpaid work in sustaining the activities of the paid economy. This paper argues that orthodox economics fails to capture the costs and values attached to unpaid productive and reproductive work, much of which is undertaken by women. Where women enter the paid economy as workers, this devaluation of their skills is reflected in their low wages and low bargaining power. When conventional analysis informs policy-making, impacts on the unpaid, reproductive sphere are ignored. The paper gives several examples of how, by failing to recognise this, economic policies may exacerbate poverty and conflict within households - ultimately undermining both gender equity and development. The challenge is to develop and mainstream analytical tools that reflect the different economic contributions that men and women make. This depends in turn on wider efforts to recognise gender equity as a key instrument in economic development, as well as an intrinsic good.