Including unpaid household activities

Abstract

The System of National Accounts, which provides information on important macroeconomic indicators such as Gross Domestic Product (GDP), household disposable income and final consumption, typically excludes the value of unpaid household activities. Exceptions are made for the production of goods for own final consumption (e.g. subsistence farming), the services from owner-occupied dwellings, and the production from employment of paid domestic staff, but the output from unpaid domestic and personal services, such as the preparation of meals, taking care of children, cleaning, repairs, volunteering, etc., is all excluded. This report deals with the impact of including unpaid household activities on macro-economic aggregates for G7-countries. It builds upon earlier work by Ahmad and Koh (2011) and van de Ven and Zwijnenburg (2016). The report starts off with discussing the pros and cons of including unpaid household activities, or more specifically, the reasons why these activities are currently excluded from the macro-economic aggregates that can be derived from the framework of national accounts. It then discusses how estimates can be compiled using statistics from time use surveys and other available information. Here, also some of the complexities related to the approximate valuation of unpaid household activities are being addressed. Subsequently, results are presented for the level estimates of GDP as well as for economic growth when including the value of unpaid household activities for the G7 economies. The report concludes with a number of recommendations on the way forward, also touching upon some of the (potential) policy implications of the work on valuing unpaid household activities.