Post by ehsanulh125 on Jan 9, 2024 12:42:46 GMT 5.5
GDP is the benchmark for measuring economic performance, but given that it was created in the 1930s to measure the performance of industrialized countries, it is hardly suitable for evaluating socio-economic arrangements and general well-being. Even Simon Kuznets, the economist considered the "father" of the indicator, was aware of the limitations of the metric, and warned decision-makers against overmystifying GDP. "You really don't have a free lunch?" The first great thinkers of economics realized already in the 18th century that the world economy is driven by self-interest, individualism, and the desire to prosper.
However, they forgot Country Email List that behind the invisible hand, very visible, busy hands also work. The non-market activities performed by households (such as food preparation, cleaning or care) contribute greatly to a country's standard of living, but they are not included in the gross domestic product. Thanks to this, inaccurate models, faulty development policy decisions and distorted economic data can be derived from GDP (DeRock, 2019). How can unpaid housework be measured? Not simply. In order to estimate the value of the work done at home, a monetary value, a salary, must be assigned to the activities.
The KSH did this with three different procedures in its 2016 study (KSH, 2016): one method is the general replacement hourly wage, where the net hourly wage of the occupation with which most household tasks can be completed (social service occupations) was taken as a basis. The second method is the special substitute, where, for example, the time spent on raising children is evaluated with the average hourly wage of kindergarten teachers. The third method is based on the opportunity cost: here, the time spent on housework is measured by the worker's own hourly wage, based on the fact that he gave up such a large hourly wage when he did housework instead of his paid work.
However, they forgot Country Email List that behind the invisible hand, very visible, busy hands also work. The non-market activities performed by households (such as food preparation, cleaning or care) contribute greatly to a country's standard of living, but they are not included in the gross domestic product. Thanks to this, inaccurate models, faulty development policy decisions and distorted economic data can be derived from GDP (DeRock, 2019). How can unpaid housework be measured? Not simply. In order to estimate the value of the work done at home, a monetary value, a salary, must be assigned to the activities.
The KSH did this with three different procedures in its 2016 study (KSH, 2016): one method is the general replacement hourly wage, where the net hourly wage of the occupation with which most household tasks can be completed (social service occupations) was taken as a basis. The second method is the special substitute, where, for example, the time spent on raising children is evaluated with the average hourly wage of kindergarten teachers. The third method is based on the opportunity cost: here, the time spent on housework is measured by the worker's own hourly wage, based on the fact that he gave up such a large hourly wage when he did housework instead of his paid work.