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Economics: Feminist Economics and GDP Measurement

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About this Lesson

  • Type: Video Tutorial
  • Length: 5:08
  • Media: Video/mp4
  • Use: Watch Online & Download
  • Access Period: Unrestricted
  • Download: MP4 (iPod compatible)
  • Size: 55 MB
  • Posted: 03/29/2010

This lesson is part of the following series:

Economics: Full Course (269 lessons, $198.00)
Economics: Macroeconomic Measurements (16 lessons, $25.74)
Economics: Aggregate Output and Income (8 lessons, $13.86)

In this video lesson, we'll look at feminist economics in the context of GDP Measurement. Taught by Professor Tomlinson, this lesson was selected from a broader, comprehensive course, Economics. This course and others are available from Thinkwell, Inc. The full course can be found at http://www.thinkwell.com/student/product/economics. The full course covers economic thinking, markets, consumer choice, household behavior, production, costs, perfect competition, market models, resource markets, market failures, market outcomes, macroeconomics, macroeconomic measurements, economic fluctuations, unemployment, inflation, the aggregate expenditures model, banking, spending, saving, investing, aggregate demand and aggregate supply model, monetary policy, fiscal policy, productivity and growth, and international examples.

Steven Tomlinson teaches economics at the Acton School of Business in Austin, Texas. He graduated with highest honors from the University of Oklahoma and earned a Ph.D. in economics at Stanford University. Prof. Tomlinson's academic awards include the prestigious Texas Excellence Teaching Award given by the University of Texas Alumni Association and being named "Outstanding Core Faculty in the MBA Program" several times. He has developed several instructional guides and computerized educational programs for economics.

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Thinkwell
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Here's a riddle: When is dishwashing not a productive activity? The answer is: When your criterion for productivity is what shows up in the gross domestic product, and when you wash your dishes yourself. I just spent the last half-hour washing my dishes, and it's as if the government statisticians don't even care. I do a lot of work at home - sweeping the floor, caring for children, caring for aged parents - and the government doesn't take any notice, because it's not activity that's been transacted in markets; therefore, it's not included in the gross domestic product.
Now 70% of all housework is done by women therefore, feminist economics - a growing branch of economics - seeks to bring about more accurate measures of the value created in the economy by including the value that's created in housework - the value created at home. Suppose I had someone come in and wash my dishes for me and I had to pay them at market rates, or I had someone come in and clean my house. What would this do to the gross domestic product if we imputed some kind of value to housework?
Well, according to one economist, Robert Eisner, if you look at housework done in the United States in the 1940s, `50s, `60s, `70s, and `80s, and if you value that housework at the market price of cleaning services, then housework probably would add about 20% to gross domestic product. That means about one-fifth of all of the value that's created in our economy isn't showing up in government statistics at all, because it's not being transacted in markets. According to the United Nations Human Development report, worldwide, probably about 40% of all value that's created in the world economy is created in housework - work being done at home not measured in government statistics.
Two economists, Kathleen Cloud and Nancy Garrett, estimate that if you impute market values to housework, that Guatemala's GDP would instantly increase by 75%, and Pakistan's by 80%, and the United States by almost 30%. Now think about what this means. In the 1960s, only about 35 to 40% of the women in the United States had jobs outside their homes for which they received paychecks. In 1999, about 60% of all women are receiving paychecks for work in the market. So by how much has gross domestic product increased because of this change in labor force participation by women? Well, women are, say for example, software engineers. A woman who has a job now creating software is getting a paycheck because of the value added by her work. And yet, if she was working at home previously, caring for children and cleaning dishes, this work is now being done by someone else, say a cleaning service that's receiving a check.
Now, hold on, there's a double counting here, because that cleaning service is now in the gross domestic market because it's a market transaction, whereas her cleaning before wasn't showing up. Therefore, the change in gross domestic product is overstated, because work that she was previously doing is now showing up in GDP because it's being done by someone else who's paid. If you take this into account, according to some measures, then Norway's gross domestic product has been way overstated; that is, the growth in GDP may have been overstated by as much as 20% because of this double counting.
It's also difficult to measure the way in which the quality of this work may have changed. I mean, after all, who would you rather have at home taking care of the house - the person who lives there, or someone who comes in from outside who may not do as good a job? Changes in quality wouldn't show up at all.
Now how do we make this situation better? How do we get measures of the value created in our economy that put the proper weight on housework? Well, this is the agenda of feminist economics - accurate measures of value. If, for example, we impute value to housework based on what you'd have to pay someone to come in and do it, that's a first step. We already do that in the national income accounts by imputing the value of the service you get by living in your house. Impute that at an approximate rental rate, and that helps us to have an accurate measure of how much value people get from all of the homes that are in the economy that aren't being traded on the market right now.
So why hasn't this change already occurred? And the answer is that before now there hasn't really been a constituency. People have been pleased, or basically pleased, with the way gross domestic product has been measured. But because feminist economics has raised our awareness of the way in which gross domestic product doesn't accurately measure value that's created, we've started thinking about ways of doing that more. So as the constituency arises for change in the way we keep our records, we're more likely to change the way we keep our records. And that suits me fine, because I know that my housework is valuable. I just assume that the government recognized that and showed me in total how much value is being created by the work that we do at home as well as the work that we do in the market.
Macroeconomic Measurements
Aggregate Output and Income
Hot Topic: Feminist Economics and the Measurement of GDP Page [1 of 1]

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