Question

•What are the implications of not measuring unpaid work in the home for measurements of overall economic activity? Explain carefully, and include how this affects comparing GDP over time and across countries.

Answer 1

We know that the three most important sources of unpaid work are : professionals, volunteers, and homemakers . Let us take the example of homemakers . They do extensive work for their families without any monetary gains in returns . When a family pays a cleaning person, a nanny, or a cook, it is considered part of the GDP . However, when people devote time and effort to cleaning their own homes, taking care of their own children, and cooking for their own families, it is not counted, even though such labor has significant value and can cause huge changes in GDP if they were counted .

This is a major limitation of GDP calculation . It neglects these valuable services . The proper upbringing of children , volunteering work at an NGO can have major implications on the human capital and resources in the economy . Not measuring unpaid work actually undermines the true GDP of a nation . It is an essential part of economic activity even though no transactions occur . When we compare GDP overtime , it will vary when work at home is done by family members and when a person is hired to do the service .