A Short History and the Philippine Experience
Solita Collas-Monsod, Professor of Economics, University of the Philippines
International Seminar at Goa, India, May 2007
Draft Version
I. The Invisible Woman
It is undisputed that the contribution of women to the economy, mostly in the form of unpaid labor, is well nigh invisible today, despite four World Conferences of Women starting in 1975, when the need to measure and value unpaid work was recognized. In the Third World Conference of Women in Nairobi in 1985 the clamor reached its peak: The Nairobi Forward Looking Strategies, as endorsed by the UN Economic and Social Council, recommended that the value of household goods and services be included in GDP: "The remunerated and, in particular, the unremunerated contributions of women to all aspects and sectors of development should be recognized, and appropriate efforts should be made to measure and reflect these contributions in national accounts and economic statistics and in the gross national product. Concrete steps should be taken to quantify the unremunerated contribution of women to agriculture, food production, reproduction and household activities." [para. 120, Report of the World Conference to Review and Appraise the Achievements of the United Nations Decade for Women: Equality, Development and Peace, Nairobi, 1985]
Non-Marketed Equals Non-Economic. When that recommendation was made in 1985, goods and services that were produced by households for their own consumption were excluded in the estimation of Gross Domestic Product (GDP. This, by fiat of the UN System of National Accounts (SNA), first published in 1953. The reasoning behind this exclusion goes something like this: only (final) economic goods and services are included in the estimates of GDP. Goods and services are economic if they are marketed. Goods and services produced for own-account consumption by households are not marketed. Therefore they are not economic. Therefore they cannot be included in GDP.
Producers of non-marketed commodities are economically inactive. There is a devastating corollary : since non-marketed goods and services are invisible in GDP, the efforts that went into producing these goods perforce became invisible as well. How? Again by definition. Per the International Labor Organization (ILO), to be a member of the labor force, or to be "economically active", one does not only have to be above a specified age (working age), but must be engaged in the production of economic goods and services - as defined by the SNA. Since the SNA-defined economic goods and services exclude those produced for home consumption, those involved in the latter's production are not members of the labor force. They are economically inactive.
Warring Efforts. One can only appreciate the irony of a United Nations which on the one hand is at the forefront of efforts to eliminate discrimination against women and "mainstreaming" them and towards gender equality; and on the other hand has laid down, through the use of narrow, inadequate, erroneous definitions, the basis for women's economic invisibility - and ultimately the discrimination against them. In the process, they have unwittingly loaded the dice in favor of "emerging markets", in the sense that the growth rates of the latter are overestimated: as household production enters the market, GDP, by SNA standards, increases, even if the production was always there - it just was not counted.
Impact of Invisibility on the Invisible: I have been teaching economics for over thirty years, and never once have I come across a definition of economics which equates it with markets. The basic fact of economics is scarcity, not markets. This cock-eyed view of the SNA of what should be included and excluded in a country's gross domestic product has not only distorted the macroeconomic picture (at best giving only a partial one), particularly in developing countries not far removed from the subsistence level; but the non-recognition of the contribution of women to the economy and society in the national statistics have also implicitly perpetuated gender inequalities. "Official non-recognition of contributions to the national as much as to the household economy obviously leads to non-recognition in policy making, planning, allocation of resources, the provision of support services and information, and of course in the distribution of the benefits of development. The failure to recognize much of the work which women do is therefore a failure to take women into account in all these areas" [APCAS/94/9].
Some Reforms: The wheels of justice turn exceedingly slow, and it took eight more years to address the Nairobi clamor. The SNA 1993 revision explicitly recognized household production of goods and services for own consumption as economic activity (para 1.21). But that had a large element of lip service to it, because while the SNA production boundary was expanded to include household production of goods (as well as water-carrying, at the insistence of developing countries) it still excludes non-marketed services. Figure 1 shows the economic activities that are "SNA" and "non-SNA" as of 1993, with previously excluded unpaid household production of goods now within the SNA production boundary, but the unpaid household production of services still outside the boundary.
In what is considered by many to be a major step forward, the 1993 UNSNA also recommended the use of special satellite accounts that can be linked to but are separate from the SNA accounts, in recognition of the limitations of the central framework in addressing specific aspects of economic life important to a specific country. They "expand the analytical capacity of national accounting for selected areas of social concern in a flexible manner, without overburdening or disrupting the central system" [1993 SNA para.21.4] - thus the terms "augmented", "expanded", "enhanced" GDP. It has been regarded by many as a "realistic" compromise between the advantages of tradition and the adaptation of new economic, social and political requirements.
A Critical Appraisal: I realize I may be a minority of one, but I confess to disappointment about its unreserved acceptance by the Beijing Conference in 1995 - a far cry , it would seem, from the Nairobi desire to have unpaid work reflected in the GDP proper. Certainly, including unpaid household services in a satellite account is better than excluding it completely. But there are disadvantages to this: First, relegating women's contribution to GDP to an adjunct, supplemental position, violates the concept of gender equality - if men and women are to be treated equally, they should be equally visible in the national accounts. An augmented, expanded, enhanced GDP - such patronizing terms - is not what is needed. What is needed is an accurate picture that reflects the reality on the ground. Why should women not be included in the "central system"? Second, insisting on a truncated GDP - and it is truncated, as we all know from various estimates (Table 1) of just how much unpaid work contributes to the economy - and then "enhancing" it is like amputating a person's leg, and then giving the amputee a crutch .
Third, the reference to the "advantages" of tradition vs. new economic, social and political requirements may be misplaced. The cavalier treatment of women's caring services in the home , one should not be surprised to learn, has not always been the norm. Over 200 years ago, in the censuses of population in both England and the United States, housewives, or more accurately women whose work consisted largely of caring for their families, were considered to be productive/gainful workers. Unfortunately, over time, that view of the role of women slowly changed, so that by 1900, housewives were no longer considered productive workers - they were formally relegated to the census category of "dependents" (which included infants, young children, the sick, and the elderly) - mouths, rather than hands. This situation, I am sorry to say, was partly due to the influence of Alfred Marshall, the greatest economist of his time. [Nancy Folbre "The Unproductive Housewife: Her Evolution in Nineteenth Century Economic Thought, in Signs, Spring 1991].
Fourth, as mentioned previously, "economic" and "market" are not, never have been, and never should be interchangeable. Certainly first world economies are market economies, but imposing that first world reality as a criterion for the developing world makes no sense. We should remind ourselves that Gross Domestic Product is the measure of the market value of all final goods and services produced in a country during a year; it is not the market value of only those final goods and services that are bought and sold in a market. Using the latter definition for fear of being overburdened is like looking for one's car keys one block away from where one lost them - simply because the light is better in the new location. It is more convenient, but you won't find the keys.
Undoubtedly, the valuation of unpaid work is difficult - but that is par for the course in national income accounting, or for that matter in any endeavor where measurement is involved. I recall that prior to its publication (come to that, it is still being criticized), Mahbub Ul Haq's Human Development Index (HDI) was the subject of savage criticism, and he was advised not to use it until the problems were ironed out. If he had followed that advise, the HDI would still be unpublished today and the world would be the poorer for it. Instead, he took the plunge - with the HDI being constantly fine-tuned, a work in progress. What was important was that the methodology used was transparent, the need for improvement was recognized, and constructive criticism was welcdome. Following the UNDP lead, many countries are now estimating intranational HDI's .
More to the point, it is not as if unpaid work in the national accounts is uncharted territory. The Norwegian national accounts for the period 1935-1943 and 1946 to 1949 included estimates of the value of unpaid household work, as apparently did other Scandinavian countries [UNIFEM, Valuation of Unpaid Work, Gender Issues Fact Sheet 1, referring to Asiaksen, Julie and Charlotte Koren, 1996, "Unpaid household work and the distribution of extended income: the Norwegian experience]. The question raises itself - if it could be done sixty and seventy years ago, why not now?
The reasons given in the 1993 SNA for excluding unpaid household services are not persuasive (see paras 1.21-1.23). Why the market sector in an economy should be more important than the non-market sector, or for that matter why the monetary sector should be more important than the real sector, is not made clear. But the one that, as far as I am concerned, takes the cake is that including own-account household services in GDP will mean that all persons engaged in such activities would become self-employed, "making unemployment virtually impossible by definition".
Well, maybe it is high time to reexamine the employment concepts again, starting from the one that counts anyone who worked at least one hour in the past seven days as employed - as long, of course, as the work was to produce an SNA-approved good or service. This, to my mind, makes the concept of employment meaningless.
There is nothing wrong, and everything right about shifting the focus from unemployment to underemployment (those employed, but seeking more work), both visible and invisible. It is clear, from looking at the statistics on poverty and employment, that it is not the quantity so much as the quality of employment that is important. The general view is that unemployment and poverty are closely connected. That is a myth. In a country like the Philippines, the poor cannot afford to be unemployed. Family poverty incidence in the Philippines was 27.5% (2000, using national standards). Poverty incidence of families where the head was self-employed (using ILO norms) was 38.3%; while poverty incidence among households where the head of household was unemployed was a much lower 14%. The self-employed group, by the way, make up over half of the total number of poor families in the Philippines. It is they, the self-employed who deserve at least as much attention as the unemployed.
In sum, the SNA cloaks the contribution of women to the economy with invisibility by using narrow, and at the very least inadequate definitions. That cloak should and can be removed. Including their contribution in satellite accounts should not be considered a final and permanent solution but rather a preliminary and temporary one.
II. Removing the Invisibility
Time-Use Surveys (TUS) to Valuation to Satellite Accounts to Full Integration: the Philippine Experience (...)
III. Conclusions and Recommendations
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