What would happen if we counted housework in the GDP?

Finn Poschmann, Evelyn Drescher
The Next City
June 21, 1999

 

The Next City asked Finn Poschmann, a policy analyst at the C. D. Howe Institute, and Finn Poschmann, chair of research and policy development, to comment

Finn Poschmann

Economic comparisons would become meaningless. Economists would remove housework from published GDP figures to allow for historical and international comparisons. Even if other countries made the same accounting change, economists would still have to remove housework because intercountry differences in the use and valuation of time and in household hygiene would cause spurious differences.

Since the prevailing wage is the usual guide to valuing household work, poor countries, as measured by wages or GDP per head, would stay poor relative to rich countries. But the accounting change would cause countries where people use more unpaid child care to report a one-time increase in GDP per head, relative to countries with more market-oriented habits. If housework were valued on an hourly basis, countries that began using improved vacuum cleaners or other household technology would lower their GDPs, unless homeworkers used the extra time to make households cleaner than otherwise. Measuring the value of housework would be difficult. Time-use surveys would have to be much more frequent and detailed. For example, our accounting system would have to distinguish between parents who watch daytime soaps and those who watch educational programs with their young children, since the early childhood education component would raise the GDP.

Calculating the GDP would be costly, with few if any offsetting benefits. Preparing the national accounts would be more time consuming, prompting statistical agencies to divert resources from other areas or causing governments to raise taxes. Excluding housework while including, for example, the value of on-farm consumption of agricultural production (as Statistics Canada does), currently makes the national accounts something of an incomplete nonsense. If housework counted in the GDP, the national accounts would be a more complete nonsense.

Evelyn Drescher

An expanded GDP would provide a more accurate picture of the country’s economy. As it is now calculated, the GDP not only excludes informal economic activity such as housework and the care of children and elders but also unpaid activities that sustain communities. It is, therefore, of limited use in measuring the economic well-being and needs of both families and communities. While it can tell us about overall marketplace productivity, it cannot measure the impact of structural adjustment or shifts between market and non-market sectors ?such as the true economic effect of a hospital closure.

Canada would have more adequate public policy. Policy makers necessarily rely on data supplied by economists and statisticians. The invisibility of unpaid work from economic measurement allows policy makers both to underestimate a country’s real productivity and human resources potential and to ignore the economic and human costs that are not “on the books.” A hospital closure means additional unpaid family care: Neither the work itself nor the need for services disappear. When unpaid work is integrated, economic and social policy analysis and development can be better targeted sectorally and regionally.

Women’s economic and human rights would be addressed. Statistics from the 1996 Census of Population confirm that women continue to do the vast majority of unpaid housework and care-giving, whether or not they work for pay. As long as we exclude “women’s work” from public policy, women will be discriminated against and disadvantaged, individually and systemically. The invisibility of unpaid work results in the loss of access to social benefits as a work right. Gender equality issues such as women’s economic autonomy, linkages between paid and unpaid work, the wage gap, and pay equity will be placed in a broader analytical framework when unpaid work is integrated into the GDP.

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