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Household satellite account for France in 2010
- 1. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio Households Satellite Account for France in 2010. Methodological issues on the assessment of domestic production. Aurélien Poissonnier, Delphine Roy (aurelien.poissonnier@insee.fr) Insee-Dese & Crest & École Polytechnique IATUR 2014 - Turku
- 2. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio Introduction • ongoing debates about GDP and its prevalence as a measure of economic activity (with abusive generalization to welfare) • domestic production still one third to one half of GDP in developed economies (Hawrylyshyn, 1976 ; Chadeau, 1992 ; Roy 2011) • development and recommendations for Households Satellite Accounts (Eurostat, 2003)
- 3. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio Plan 1 A households satellite account for France in 2010 2 Some international comparisons 3 Methodological issues behind the HHSA Time and wage issues Accounting issues
- 4. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio Plan 1 A households satellite account for France in 2010 2 Some international comparisons 3 Methodological issues behind the HHSA
- 5. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio What we do • HHSA based on Time Use Survey (TUS) and input method • value hours worked with wages from annual declaration of social data (DADS) lled by all employers • derive the complete sequence of accounts (production to capital account) • detail functions of domestic production (housing, food, clothing, care, transportation and shopping)
- 6. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio Domestic working time from TUS Overall at least as many hours of domestic work as paid working time Table: Average working time per person for three possible perimeters of domestic work Perimeter core (I) intermediate (II) extensive (III) Daily 2 h 07 3 h 04 3 h 53 Weekly 14 h 50 21 h 30 27 h 14 Share of volunteer work 3.7% 3.8% 5% Women's Share 72% 64% 60% Coverage: individuals aged 11 and over, France (excl. French Guyana and Mayotte). Source: Insee, 2010 Time Use Survey.
- 7. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio Production account Table: Houshehold domestic production account for three denitions of production in France in 2010 in billion euros Core Intermediate Extensive Perimeter Perimeter Perimeter Labour 687 72% 944 77% 1 239 76% IC 255 27% 268 22% 315 19% CFC 17 2% 19 2% 84 5% Dom. Prod. 959 100% 1 231 100% 1 639 100% Gross VA 704 73% 963 78% 1 324 81% Source: National accounts - Base 2005, Insee - our calculations
- 8. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio Compared orders of magnitude in billion e • GDP 1,937 be; Consumption 1,085 be; GDI 1,290 be • Domestic production 959 be to 1,639 be • Revisions with the core perimeter • Domestic Value Added +704 be (+36% GDP) • Consumption: +686 be in the core perimeter (+63%) • GDI: +704 be (same as value added) (+55%) • Savings ratio: from 16% to 11%
- 9. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio Ventilation by functions Table: Ventilation of domestic production in 2010 in France (Core perimeter) in billion e Housing Food Cloth. Care Transp. Total♦ Volunteer 276 472 68 100 43 959 28 29% 49% 7% 10% 5% 100% 3% ♦ : Total is excluding volunteer work Source: National accounts - Base 2005, Insee - our calculations
- 10. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio They do it themselves • domestic food production: 472 be cons. in restaurants and eateries: 59 be • household upkeep: 276 be 9 be for employing gardeners, housekeepers... • clothing 68 be 2 be of dry cleaning • transportation 43 be 28 be in taxi, train, plane, bus, metro... • care 100 be Social work activities (67 be) including GG and NPISH personal consumption
- 11. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio Plan 1 A households satellite account for France in 2010 2 Some international comparisons 3 Methodological issues behind the HHSA
- 12. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio Table: HHSA estimates in 5 countries: eects on key macroeconomic aggregates Revisions Income and Savings ratio Country Year GDP Cons. Income SNA non-SNA USA 1946 +50% +63% +59% 8.3% 10.8% USA 1965 +39% +49% +49% 8.6% 11.5% USA 1997 +36% +34% +38% 1.8% 8.5% USA 2004 +27% +26% +32% 1.8% 4.2% Finland 2001 +40% +59% +81% -1.2% 0.2% Finland 2006 +39% +55% +77% -1.8% -0.3% Basque 1993 +49% +74%* - - - Basque 1998 +39% +64%* - - - Basque 2003 +33% +56%* - - - UK 2000 +63%* +95%* +93%* 4.2% -6.9%* Finland 2001 +36% - - - - Germany 2001 +43% - - - - *: our calculations, -: not available : SNA refers to production and other concepts as dened by the System of National Accounts, while non-SNA refers the extension of these concepts for the purpose of the Households Satellite Account. Cons.: household nal consumption includes individual consumption except for Basque Country
- 13. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio Table: HHSA estimates in 5 countries: eects on key macroeconomic aggregates Revisions Income and Savings ratio Country Year GDP Cons. Income SNA non-SNA USA 1946 +50% +63% +59% 8.3% 10.8% USA 1965 +39% +49% +49% 8.6% 11.5% USA 1997 +36% +34% +38% 1.8% 8.5% USA 2004 +27% +26% +32% 1.8% 4.2% Finland 2001 +40% +59% +81% -1.2% 0.2% Finland 2006 +39% +55% +77% -1.8% -0.3% Basque 1993 +49% +74%* - - - Basque 1998 +39% +64%* - - - Basque 2003 +33% +56%* - - - UK 2000 +63%* +95%* +93%* 4.2% -6.9%* Finland 2001 +36% - - - - Germany 2001 +43% - - - - *: our calculations, -: not available : SNA refers to production and other concepts as dened by the System of National Accounts, while non-SNA refers the extension of these concepts for the purpose of the Households Satellite Account. Cons.: household nal consumption includes individual consumption except for Basque Country
- 14. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio Plan 1 A households satellite account for France in 2010 2 Some international comparisons 3 Methodological issues behind the HHSA
- 15. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio Plan 1 A households satellite account for France in 2010 2 Some international comparisons 3 Methodological issues behind the HHSA Time and wage issues Accounting issues
- 16. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio What is domestic work ? No objective denition third party criterion and reference to social norms are not enough Frontier of SNA production is imperfect and arbitrary, HHSA will be just as much ! Test three perimeters Debatable cases for productive leisures, child care, self-transportation
- 17. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio We favour the core perimeter • most consensual • less subject to productivity overestimation Sensitivity Working time: almost doubled (Table 1) Production: +30% from I to II, +71% from I to III (Table 2)
- 18. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio Substitute wage Prefer specialized substitute Each wage valued at the average hourly wage of the least qualied specialist Average hourly wage for domestic task ≡ 17e/h gross or ≡ 10e/h net Generalist substitute OK Only 3% lower than specialised substitute Composition eect: only ±0.1% Simpler method - good alternative Minimium wage NO National reex: SMIC 10.4e/h gross, 6.9e/h net Very country specic, not suited for comparisons Scales down by 40% the value of domestic work Opportunity cost NO Welfare based
- 19. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio Gross or net wage Market production: taxes and social contributions are part of production Black market: no taxes but how prices/quality are aected? Domestic production: ? Chose convention of gross wages; net wage -41% of domestic work Worked and paid times Constraint of the data source Reference time in sources: TUS= worked time; DADS= paid time On aggregate 22% wedge but no information on detailed occupations
- 20. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio Plan 1 A households satellite account for France in 2010 2 Some international comparisons 3 Methodological issues behind the HHSA Time and wage issues Accounting issues
- 21. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio Input or output: dierent models... Implicit model with output method Non market production is a constraint (social norms, limited time or nancial ressources) If HH could they would buy from the market ⇒ market price is a correct valuation for domestic production Implicit model with input method Non market production is a choice ⇒ domestic production is essentially dierent from market equivalent Input method should be preferred ... with a common problem what is the right price (wage)? ... with a welfare temptation
- 22. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio The driving to the shop to purchase food to cook dinner problem Eurostat recommend distributing the production of ancillary functions to principal functions. PB Confrontation with other data is needed for this reallocation while the complete ventilation may be found interesting. Reallocating ancillary production implies +5% production but identical consumption and value added.
- 23. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio Invisibility of volunteer work Domestic work for other households (2 billion hours) is not included in total domestic work (40 billion h in the core perimeter). Equivalent to 3% of production. Volunteer work = NPISH production is not HH consumption expenditure Imputing a wage for this work modies net lending-net borrowing with no actual nancial transaction as a counterpart ! We value domestic work separately.
- 24. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio Savings ratio • SNA savings ratio 15.9% in 2010 • HHSA savings ratio 11.2% with gross wages • 13.0% with net wages • -3.4% if prod. valued with gross wages but taxes and social contrib. are imputed in the HHSA Third case raises serious accounting inconsistencies
- 25. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio Summarized results Favoured estimation +36% GDP; +63% Cons.; +55% GDI and −5pts savings ratio Domestic productions outweigh market equivalents Sensitivity of domestic production to methodological choices • Denition of domestic production +71% prod • Net wages -30% prod • Generalized substitute method -2% prod • Double counts +5% • Distribution of ancillary functions +5%, neutral on Cons. and VA • All durables are productive +8% • Sensitivity to PIM hyp. ±6% on CFC, only ±0.1% on prod
- 26. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio Thank you for your attention
- 27. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio Double counts some production for own nal use in SNA : kitchen garden, sh and game... and major maintenance of dwellings in billion e HHSA Activity Gardening... Construction Hours*wage 49 2.7 SNA B1=P12-P2 2.5 2.3 P12 3.4 4.9 P2 0.9 2.6 Source: Insee : National accounts - Base 2005, Time Use Survey 2010, DADS 2010 - our calculations Table: Labour input from TUS and Output for own nal use • Double counts - TUS ⇒ +5% of domestic production. • Overestimation of productivity with input method • Favour preexisting estimate
- 28. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio Reclassications from nal consumption ... to intermediate consumption • 23% of households nal consumption expenditure (core perimeter) • from 255 to 315 billion e (due to car use) ... to investment (GFCF) • 2% of households nal consumption expenditure (core perimeter) • convention: durables used for recreational purposes are not productive
- 29. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio The Taxes, subsidies and changes in inventories dilemmas Taxes and subsidies • could impute taxes and subsidies • could also reallocate some personal cons. of GG to subsidies (food bank) • main amounts are properly treated (dwellings, car) • residual amounts are small (sub. are conditional on prod.) • raise accounting issues on net lending- net borrowing Changes in inventories • users' and producers' stocks, also work in progress • users' stock where already accounted for in SNA • Intuition: mainly work in progress for major maintenance of dwellings (already accounted for) • others: jars of jam, unnished knitting (hyp=0)
- 30. HHSA France 2010 Poissonnier - Roy HHSA 2010 International Issues behind HHSA Time and wage issues Perimeter Substitute wage Gross or net Accounting issues Output Input Ancillary functions Volunteering Savings ratio The new denition of capital and the measurement of its services What is productive capital? Input method: capital input = depreciation All durables depreciate, are they all productive ? Assume that durables for recreational use are not productive Assuming that all durables are productive ⇒ +8% production in core perimeter How to measure durables services? We use the Perpetual Inventory Method, ±6% of CFC but only ±0.1% prod. More precise and less conventional method would be better especially if exhaustive denition of capital is chosen.