Chapter 3 Adjusted economic indices

Q: has any economic index been developed to include the work done by homemakers in an adjusted GDP?

R: Yes, some efforts have been made to quantify and include the value of household work, such as that done by homemakers, in economic measures. For instance, the Bureau of Economic Analysis (BEA) in the United States publishes a satellite account that estimates the value of production by households[^1^]. This kind of account typically involves measuring the value of services that households perform for themselves, like cooking, cleaning, and childcare, which are not captured in traditional GDP calculations.

However, it’s important to note that these adjusted measures are not commonly used or accepted as the standard way of measuring a country’s economic output. Traditional GDP still excludes most home production and other “non-market” activities[^2^].

Overall, while there are methods to account for the economic value of homemakers’ work, they haven’t been universally adopted or integrated into the primary economic indicators used globally.

Sources:

• 1: Bureau of Economic Analysis - Household Production
• 2: Brookings - GDP as a Measure of Economic Well-being

3.1 Bureau of Economic Analysis

Q: Summarize Bureau of Economic Analysis - Household Production

R: During the COVID-19 recession in 2020, household production experienced a significant increase, providing some economic relief during the challenging period. This rise was largely driven by individuals, particularly women, transitioning from employment to nonemployment. As the pandemic forced people to stay home, activities typically done outside, such as shopping and travel, decreased. In contrast, in-home tasks like cooking and housekeeping saw an uptick.

Interestingly, despite the widespread closure of in-person schooling and daycare, childcare did not see a significant increase within demographic groups. This might be due to the redistribution of childcare responsibilities among family members or the use of remote learning.

The value of this increased household production, when evaluated using the wages of household workers, also rose during the COVID-19 recession. This reflects the economic value of the often undervalued work done within homes.

However, it’s important to note that over the long term, the size of household production relative to market production has been on a decline, notwithstanding the temporary surge in its importance during 2020. This trend may reflect broader societal shifts towards increased formal employment and the outsourcing of traditional household tasks.