Question

What is the significance of counting paid domestic work but not unpaid housework, or of not counting volunteer work, in GDP?

Answer 1

Any activity which has bilateral payment is added in the GDP such as the work done by a domestic maid for which a payment is made. However if the same work is done by the housemates themselves they are not paying to each other and this is not added to the GDP. Economists do believe that even if there is no payment made household activity should be added to GDP because it enhances the value of GDP of an economy. If the unpaid house work or other volunteer works are added in the GDP then it will increase the GDP dramatically. Because there is no methodology of of measuring such work or its opportunity cost, it is not included in the calculation of GDP and therefore GDP is highly undervalued.