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If a person leaves a low-paid job to provide unpaid family care, what effect on GDP and welfare is possible?

Answer and explanation

Correct answer: GDP may fall while family welfare rises

GDP generally records market-valued production, so the wages and measured output from the job may disappear when the person leaves it. Unpaid household care is often not included in conventional GDP, even though it can provide valuable services, emotional support, and security. Therefore, measured GDP may decline while the family’s actual welfare improves. The word “may” is important because the outcome depends on the value and effects of the care.

Related tags

Unpaid WorkFamily CareNon-Market ServicesGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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