GDP

The Gross Domestic Product (GDP) is modern day’s inescapable indicator for prosperity. However, it is not only a poor measure of prosperity but also a highly gendered one. Let me tell you why.

The modern concept of GDP was coined by Simon Kuznets in 1934, as a method of national income accounting. It measures the aggregate monetary value of goods and services bought by a final consumer, in a given country, within a given time period. Since its global inauguration, it has become the sole juror of economic growth and societal well-being. Now you might ask, why is equating GDP with societal well-being an ugly game to play? 

Firstly, GDP is an aggregate measure which glosses over nuances. It, for instance, does not distinguish between segments of populations. Economies may have a yearly increase in social inequalities, such as the gender pay gap, without the GDP reflecting such growing divides in society. Secondly, the GDP also fails to account for environmental impacts. 

Thirdly, and I think most importantly, the GDP does not account for unpaid work and non-market transactions. When a ‘non-primary producer’ informally contributes to a primary producer’s productivity by cooking, cleaning, homemaking, driving, caretaking (etc.), it is not regarded as ‘productive’ work. Worse than that, this work is considered ‘leisure’ within the GDP framework, even though no one performing such work would ever personally claim to be “at leisure”. As if.

To put it simply, the informal sector enables the formal sector to be productive. It has historically been (and is still currently worldwide) dominated by women. Thus, as concluded by the earliest of feminist economists, a large share of women’s work has been completely unaccounted for within calculations of GDP. 

Therefore, the impact of GDP gives rise to two important gender issues: 

Firstly, the GDP shapes discourse within societies. In 2015, the McKinsey Global Institute predicted that if there was gender employment equality, global GDP would increase by 26%. However, combating gender inequality within an economy is not simply about getting women into the workforce. Such a mindset implies that current women’s work, the informal sector, is not ‘productive’ and not contributing to the GDP. It’s paramount to redefine the notions of what is ‘productive’ and ‘unproductive’ within society to stop reflecting patriarchal assumptions. This is crucial for gender equality as it would also contribute to all genders working side by side in the informal sector. For men to take care of families and homes and be considered productive as much as if they would have careers in the formal sector. 

Secondly, the GDP is also key in creating policies for the future. If unpaid work in the informal sector is not key in understanding the make-up of economic productivities, then women’s contributions and work are not considered in deliberations for future policies. As such, money and societal resources are not prioritised for a sector labelled as ‘leisure.’ In 2019, New Zealand measured that around half their GDP was the value of unpaid work. Now, how can one make policies for the future and understand where needs are if one overlooks the single largest sector of a nation’s economy? 

The Economist called for a ‘new metric’ that included “unpaid work in the home, such as caring for relatives.” Such recognition is a reflection of society’s change away from the GDP. It has contributed to the development of other economic indicators such as the Human Development Index, Time-Use-surveys, Capability Approach, Living Standards Framework, and Genuine Progress Indicator. These measures aim to give a voice to those who are drowned out by the current private/public, productive/unproductive, paid/unpaid sector divide. The new measures are now used as supplements to the GDP by many politicians and policymakers.

However, the GDP still lives on. It is still the most dominantly used prosperity indicator. It is still the basis for many states’ policymaking. And while the GDP lives, its inherent prejudices live with it.