Households’ unpaid production and use of market services

Unpaid household work, conducted to promote the well-being of one’s household, is mainly excluded from the System of National Accounts (SNA) and GDP. Hence, no attention has been paid to the role of household production in the economy and as a booster of consumption opportunities. In our latest report we present the value of services produced by Finnish households in 2006. The calculations were compiled as a Satellite Account of Household Production, in accordance with the SNA model.

Gross value added of household production in 2006 in Finland totalled EUR 75 billion. Of this, the national accounts recognised 9.4 billion, mainly derived from the production of imputed housing services by owner-occupied dwellings. The other EUR 65.6 billion remained excluded from the national accounts. This sum would have increased GDP, or the gross value added to the official economy, by 39%. Recognising the value of self-produced services would have increased household consumption by 55%. From 2001 to 2006, the gross value added of household production at market prices increased by 19% and the total value of services grew by 25%, indicating an increase in the material intensity of household production. Indeed, shopping is a vital part of household production. In gross value added, the share of the time and travel costs related to shopping has further increased, totalling some EUR 11 billion in 2006.

The report also describes household production by task, specified as housing services, food services, clothing and care services, informal help to other households and voluntary work. The most important and highest-value household production tasks are related to the production of housing services as well as meals and snacks. Value added by housing-related services totalled EUR 32 billion, and that of meal production totalled EUR 20.7 billion. The production of clothing and care services varied between EUR 6 and 7 billion.

The value of household production varies at different stages of life. For single and couple households, its value was highest among couples older than 64 years of age, in whose case gross value added of production totalled more than EUR 40,000 per household per year. In two-parent families with children, the value of production was even higher. In families with small children, childcare raises the production value close to EUR 49,000, even after deducting approximately EUR 2,700 per household for child home care allowances and parental allowances granted by the public sector. In families with school-age children, the value of production was almost as high, at EUR 48,000 per year per household.

Replacing household production with purchased services is most frequent with respect to acquiring meals and snacks. In two-parent families with children, these purchases represent approximately one third of the value of self-produced meals and, for people under 45 years living alone, approximately one half. For couples older than 64 years of age, the share represented by purchased services is the lowest, at approximately one tenth. In addition to households, care services are mainly produced by the public sector. Purchasing care services from private businesses remained very marginal in 2006, with the exception of households in the oldest age groups. Clothes and textiles are cared for by households themselves, with the use of laundry services remaining very minor. The results also indicate that readiness to outsource domestic work is higher in the households of the youngest age groups, under 45 years of age, than among older age groups. However, the level of household production will probably increase in the short term. This is due to the growth in the number of pensioners and the fact that they conduct high amounts of domestic and voluntary work. The high share of voluntary work, particularly in families with children and retired persons’ households, also indicates its importance as a driver of social well-being.

The first Household Satellite Account for 2001 was compiled in cooperation between Statistics Finland and the National Consumer Research Centre. The production figures obtained were integrated into the household sector accounts of the core national accounts. In this report, the Household Satellite Account has been updated with 2006 data. The data now published is based on calculations published in Finnish national accounts in July 2009, which are directly comparable with 2001 calculations.

Johanna Varjonen, Kristiina Aalto
Households’ unpaid production and use of market services (pdf in Finnish)
National Consumer Research Centre. Publikations 2/2010

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