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Discuss the argument that GDP understates national well-being because there is not an allowance for people...

Discuss the argument that GDP understates national well-being because there is not an allowance for people working fewer hours than they once worked.

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GDP is defined as Gross Domestic Product i.e. Sum of all goods and services produced within the boundaries of a nation in a financial year. However, GDP has its flaws as it fails to factor-in the well being of a nation.
1.GDP gets increased when the country faces earthquake and the rebuilding process is counted in GDP calculation. But a country is actually better off by not facing any earthquake. The absence of any devastation in a particular is not factored-in for GDP calculation, which seems unfair.
2.Secondly, GDP do not consider leisure hours. An employee working for 12 hours and another working for 8 hours with similar or even just a slight variation in productivity, the 12 working hours contribute more to GDP than 8 working hours even if the person working 8 hours has better work life balance, which means less stress, less medical bills, a healthy life and better productivity. However, all these benefits are ignored in GDP calculation.
Hence, GDP does not give the real picture of a nation.

Rahul Sunny answered 1 year ago
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