In a recent episode of Economics Explored, Adept Economics Director Gene Tunny spoke with American economist Misty Heggeness, author of Swiftynomics, about a deceptively simple question: what do we actually count as economic activity? The discussion quickly moved to a deep issue in economic measurement — the fact that large amounts of productive work, particularly unpaid care and household work, sit outside our headline statistics.
This raises an obvious follow-up: why does GDP ignore so much productive work?
Gross Domestic Product measures the value of final goods and services produced and sold in markets. It was developed in the mid-20th century to help governments understand economic capacity, manage fiscal policy, and stabilise economies during shocks.
GDP was never intended to measure wellbeing, total effort, or social value. It is a measure of market production. Misty Heggeness’s critique is not that GDP is mis‑measured, but that it is conceptually narrow and nonetheless widely used as a proxy for broader economic and social well‑being that it was never designed to capture.
There are strong reasons to exclude unpaid work in the home from GDP.
First, valuation is inherently difficult. GDP relies on observable prices. Unpaid care and housework have no market price, so any valuation must be imputed. Whether we value home cooking at the wage of a chef, the wage of a cleaner, or the opportunity cost of the person doing it makes an enormous difference to the final number.
Second, comparability matters. GDP works because it is broadly consistent across countries and over time. Household norms, family structures, and caregiving arrangements vary widely. Including unpaid work risks undermining that comparability.
Third, there is the risk of double-counting. Household production often uses market inputs—groceries, energy, and appliances —already included in GDP. Without careful boundaries, measured output could be inflated.
Finally, GDP aligns closely with fiscal capacity. Governments tax market activity, not household labour. In macroeconomic management, GDP remains closely tied to what governments can realistically afford to spend.
From this perspective, GDP excludes unpaid work not because it lacks value, but because including it would weaken GDP’s usefulness as a clean, reliable macroeconomic indicator.
Still, as Heggeness argues, the exclusion has consequences.
Time‑use data show that, on average, once unpaid work is included, women perform at least as much and typically more total work per day than men, particularly in couples with children and many dual‑earner households. Official labour market statistics can obscure this reality.
In Australia, Dr Leonora Risse, an Associate Professor of Economics at QUT, has estimated in her new research that unpaid labour is about $688 billion annually (equivalent to one-third of Australian GDP). That is a substantial amount of productive activity to exclude from the headline measure, and it may influence policy debates around parental leave, childcare and aged care.
These concerns were central to the Stiglitz–Sen–Fitoussi Commission (2009), which argued that GDP should not be treated as a measure of wellbeing. The Commission explicitly noted that household production and unpaid work are economically meaningful, even if they are not captured in GDP.
Crucially, the recommendation was not to cram everything into GDP, but to develop complementary measures that better capture living standards, sustainability, and distributional outcomes.
Misty Heggeness’s work fits squarely in this tradition.
Many economists and statisticians remain cautious. According to a national accounting expert at the Economic Statistics Branch of the United Nations Statistics Division (UNSD)
“… there’s one key reason why nation states invest in something like the national accounts. And to me that’s primarily because they care about employment and they care about taxation…” “…The informal economy, the household sector, they’re important to understand for other reasons, but you’re not going to be designing your monetary or fiscal policy to impact on those…” (Interview with UNSD statistician, New York, 2019).
As a result, many statistical agencies — including the ABS — prefer satellite accounts that estimate household production alongside GDP rather than including it in GDP. However, the ABS not yet produced a household production satellite account (see Chapter 23 Satellite accounts | Australian Bureau of Statistics, para 23.8). It noted:
“The ABS has not produced a household satellite account as such to date. A number of conceptual, methodological and funding issues would need to be resolved prior to its production, given there is no agreed standard for a household satellite account.”
The ABS is right to point out these issues. Regardless, other statistical agencies have forged ahead. Examples of national statistical agencies that have implemented household-production (unpaid work) satellite accounts:
Despite the methodological challenges, an Australian household services satellite account would be a useful contribution to the Australian policy discussion.
GDP ignores much productive work by design, not by accident. That design choice is defensible — but consequential. Swiftynomics challenges us to recognise those consequences without discarding a tool that still does an important job.
The real task is not to replace GDP, but to stop treating it as a measure of everything that matters.
Published on 24 February 2026. For further information, please contact us at contact@adepteconomics.com.au or call us on 1300 169 870.