CENTRAL BUREAU OF STATISTICS The Netherlands

CENTRAL BUREAU OF STATISTICS The Netherlands

CENTRAL BUREAU OF STATISTICS
The Netherlands
National Accounts Research Division
UNCOVERING HIDDEN INCOME DISTRIBUTIONS: THE DUTCH APPROACH
Cornelis A. van ~ochove*
Head of the National Accounts Research Division
Nr. NA-016
1987
The views expressed in this paper
are those of the author and do
not necessarily reflect the views
of the Netherlands Centra1 Bureau
of Statistics
Contents
l. The problem
2. The micro-macro link: primary and secondary income
3. Individual benefits of collective expenditure
4. Dictributional implications of informal production
5. Households in an integrated meso-system
References
P e r s o n a l incorre d i s t r i b u t i o n d a t a based on t a x r e c o r d s a r e a f f L i c t e d w i t h twc
~ a j o rinadequacies: t h e y cover i n c o r r p l e t e and s y s t e m t i c a t t y biased;
and
c o n c e p t u a l t y they were o n t y p e r t c f income, : The t o r i r e r cou t d be s o t v e d t o sore
e x t e n t by L i n k i n g t h e r i c r o d a t a t o t h e househctd income o f t h e n a t i o n a t
accounts.
T h i s r e o u i r e s m o d i f i c a t i a n o f t h e inccme concept and d e t i n e s t i o n c f
t h e household s e c t o r i n t h e n a t i c n a l accounts.
The main conceptuat
inadequacies a r e t h a t i n d i v i d u a L benef it s o f p u b l i c expendi t u r e a r e i c p o r e c
and,
second,
t h a t the d i s t r i b u t i o n a t impLications o f inforrnal production ( t h e t
can be ceasured by r e a n s o f t i r e budcet surveys) a r e n e ~ t e c t c d . E c t h
inadeouacies can be rernedied by chancing t h e s t r u c t u r e o f t h e n a t i o n a l
accounts.
These s h c u l d c o n t a i n a core w i t h s rror'erate numter o f householc
s e c t o r s and an income ccncept t h a t i s c l o s e t o t h e one e r p l c y e d i n i n c o ~ et 2 x
records;
and a nurrber of nodutes.
Th€ f i r s t o f these p r o v i d e s a f u r t h e r
breakdown o f t h e household s e c t o r s i n t h e core.
t h e Same sectors,
module provides,
Thr s e c o n i one provides,
d a t a on i n d i v i d u e l b c n r f i t s o f p u b l i c expendi t u r e .
a g a i n f o r t h e sane sectors,
fcr
The t h i r d
i n f o r r , a L p r o d u c t i o n data.
T o c e t h c r these t h r e e sodutes cons t i t u t e a s y r t w o f S o c i o Eccnocic Accounts.
The problem
PersonaL income d i s t r i b u t i o n has been a r r a j o r p r e o c c u p a t i o n o f econoflic
s t a t i s t i c i a n s s i n c e t h e days c f Grepory Kinc. Yet,
f i e l d i s f a r frorr s a t i s f a c t o r y because o f t h r c
s t a t i s t i c s o f most c c u n t r i e s .
t h e p r e s e n t s t a t e of t h e
~ j o rGaps i n t h e o f f i c i ô l
These gaps a r e so i r i r ~ o r t a n tt h a t i t i s no
e x a g g e r a t i o n t o say t h a t ' t h e '
income d i s t r i b u t i o n remains hidden. The f i r s t of
these Gaps concerns t h e d i s t r i b u t i o n o f t r a d i t i o n a l l y d e f i n e d income.
Larpe,
t h e l a t t e r c o i n c i d e s w i t h t h e income concepts e ~ p l o y e dby t a x
a u t h o r i t i e s : monetary incore.
Consequently,
d a t a a r e t h e i n c o ~ et a x r e t u r n s .
strai'htforward
t h e main sources f o r d i s t r i b u t i o n a t
Rost p u b l i s h e d d i s t r i b u t i o n a l d a t a a r e
t a b u l a t i o n s of these r e t u r n s . Next t c this,
accounts c o n t a i n cacro-data
t o as t h e v i c r o - n a c r c
o u t t o be t w o f o t d :
the nationat
on t h e incone o f t h e househcld sector.
t h e r e i s no d i r e c t Linkace between t h e s e two datasets.
Linkaoe.
Ususlly
This probles i s r e f e r r e d
I t i s e x p l c r e d i n s e c - t i o n 2.
The p r o h l e r t u r n s
imprcved Linkace r e q u i r e s a d j u s t r r e n t s o f aacro-concepts t h e t
a r e n e t atways d e s i r a h l e frm a macro-point o f view;
paid,
By and
and even i f t h i s p r i c e i s
t h e r e s t i l l w i t t be d i s c r e p a n c i e s between t h e nacro-data and t h e
a o c r e ~ a t eof t h e n i c r c - d a t a .
The two o t h t r v a j o r aaps i n c f f i c i a t incowe
d i s t r i b u t i o n s t a t i s t i c s a r e caused by t h e f a c t t h a t t h e t r a d i t i o n a l i n c o ~ e
concepts have becove cutdated.
i s t h e pradua L,
but substantiat,
Two t r e n d s are r c s p o n s i k l e f c r t h i s .
The f i r c t
i n c r e a s e over t h e p a s t few decades o f
c o t l e c t i v e e x p e n d i t u r e cn coods and s e r v i c e s c f which ttic benef i t s accrue t c
i n d i v i d u 8 Cs and i n d i v i d u a l households. Sect i c n 3 surveys t h i s .
The second t r e n d
i s t h e i n c r e a s e i n sope types c f i n f o r v a t p r c d u c t i o n by househotds,
E.C.
60-it-
y o u r s e t f a c t i v i t i e s and t h e c r c w i n g awareness t h a t i n f o r n a l p r o d u c t i o n o f scocs
2nd s e r v i c e s r h o u t d be t a k e n i n t o acccunt,
and i n d i s t r i b u t i c n a t data,
because it,
b o t h i n aggrecate incorre r e a s u r e s
too,
causes divergenties between
monetary incorre and a c t u a l a v a i l a b i l i t y o f poods and services;
section 4
discusses t h i s issue.
I n case o f t h e second and t h i r d cap,
t h e b a s i c p r c b l e m i s t h a t t o c l o s e thea
can onLy be e f f e c t i v e l y a c h i e v e d w i t h i n a comprehensive s t a t i s t i c a l f r a r e w o r k
L i k e t h e n ~ t i o n a laccounts.
@ u t t h i s reouires,
again,
t h a t riray be u n d e s i r a b l e f r c r irany p o i n t s o f view.
adjustmerit o f t h e l a t t e r
To a v o i d t h i s ,
a
r e s t r u c t u r i n g o f t h e n a t i o n a l a c c w n t s i s necessary. S e c t i o n 5 b r i e f t y e x p l a i n s
t h i s and i n d i c a t e s how t h e r e s u t t i n c s y s t e a h e l p s u n c c v e r i n c t h e i n c o a e
distribution.
2. The micro-macro
t i n k : p r i ~ a r yand secondary incorre
Why worry about r r i c r o - m a c r o Linkace a t a l t ? I f incorre d i s t r i b u t i o n d a t o a r e
why
used f o r d i s t r i b u t i o n a t a n a l y s i s and macrc-data f o r t h e i r own purpose,
s h o u t d one want t o t i n k therr? There a r e two i r r p o r t a n t
-
-escns.
First,
t h e raacre-
d a t a a r e u s u a t l y based on i n f o r ~ ~ a t i of rno a more sources t h a n t h e m i c r o - d a t a i n a sense they c r e b e t t e r .
Therefore,
w i t h data on t h e p r o d u c t i o n process,
Second,
t h e nacro-data a r e i n t e c r a t e d
on c a p i t a l financinc,
and so on.
As soon
as one wishes t o a n a l y s e r e t a t i c n s betueen i n c c ~ ed i s t r i b u t i o n and t h e s e
t i n k a o e w i t h t h e n a t i o n a l accoiints t o t a t s i s e s s e n t i a t .
processes,
Therefore,
t h i s s e c t i o n discusses t h e problercs i r m L v e d i n t h i s Linkace.
B r o a d t y speakinc,
n a t i o n a l accounts and t a x a u t h o r i t i e s erspLcy t h t s a r e i n c o a e
concepts f o r hovsehoLds o r i n d i v i d u a l s .
T h i s concept s t a r t s a t t h e i n c o c e
r e c e i v e d as a consecuence o f p a r t i c i p a t i o n i n t h r . p r c d u c t i o n p r o c e s s (e.c.
waces,
sa Laries,
o p e r a t i n y s c r p Lus o f p r i v a t e u n i n c o r p a r e t e e n t e r p r i s e s ) ,
t o t h i s a r e p r o p e r t y inccrre ( i n t e r e s t ,
subtracted.
I n sone s y s t e r r . ~of n a t i o n a t accounts, e.c.
r e s u L t i s d e f i n e d as ' p r i m a r y incorre'.
concept,
d i v i d e n d s etc.)
added
whereas c o s t s a r e
t h r Dutch systes,
the
Tax systees may n o t d e f i n e e s i r i l a r
h u t 811 i t s corrponents a r e usuat Ly on t h e t a x f o r ~ s . I n n a t i o n a l
accounts,
a nurrber o f f l c w s a r e added t c p r i m n r y incoee i n o r d e r t o o h t a i ~
secondary i n c o ~ e . These f l o w s are:
(negat i v e l y ) n e t preaiurrs,
of course),
s c c i a t s c c u r i t y c o n t r i b u t i o n s and
s o c i a t we L f a r e benef its,
d i r e c t t a x e s (nesat i v e l y ,
as weLL as some o t h e r i n c m e fLcws Like d o n a t i c n s t o c h a r i t i c s .
The
r e s u l t i n 9 seccndery i n c o a e i s c u i t e s i ~ i L a rt o t h e ' n e t i n c o r r c ' ernplcyed i n t a x
data.
T h i s broad s i r r i i a r i t y o f ccncepts wcut6 seen; t o Lepd t o easy t i n k a r e between
t h e n a t i o n a l accounts d a t a f o r t h e a ~ g r e c a t eincome o f hcusehctds anc t h e r i c r o d a t a d e r i v e d f r o n t a x r e t u r n s . Yet Linkace i s f r e c u e n t l y absent.
reasons f o r t h i s :
t h e coverage d i f f e r s ;
There a r e f o u r
i n s p i t e o f t h e b r c a d s i r i l a r i t y of
concepts t h e r e a r e a nunber o f conceptuat d i f ferences;
s t a t i s t i c a l methodoLogy cause d i f f e r i n o r e s u L t s and,
d i f ferences i n
finaLty,
statistical
d i c c r e p a n c i e s a r e caused by bLack e c t i v i t i e s and b t a c k income flows.
Sources o f discrepanties
D i f f e r e n c e s i n covera'e
corre i n two kinds.
First,
t h e houcehold s e c t o r i n
n a t i o n a l accounts i s d e f i n e d more b r o a d l y t h a n t h e sum-total o f households o r
i n some systerns o f n a t i o n a l s c c a i n t s i t i n c l i ~ d e s (mainty f o r
individuals:
practica1 reasonslprivate non-profit
as churches,
Labour unions,
s p o r t s clubs,
t h e US),
o r c a n i z a t i o n s w o r k i n ~ï o r households,
non-commercial
such
r e c r e a t i o n a l o r - a n i z a t i o n s such as
c h a r i t a b l e o r c a n i z a t i o n s (such as t h e R o c k e f e l l e r f o u n d a t i o n i n
and so on. The seccnd a i f f e r e n c e i n coverape i s caused by t h e f a c t
t h a t income t a x e s need n o t cover a t 1 households o r i n d i v i d u a l s . Usuatly,
i s a t h r e s h o l d below which nc i n c o r e t a x i s levied;
countrier,
c.c.
t h e Netherlands,
moreover,
there
i n roae
a p a r t o f t h e h o u s ~ h o l d st h a t have onLy one
wage i n c c v e need n o t r e t u r n a t a x f o r r : t h e i r d i r e c t t 2 x i s deducted f r o r t h e i r
paycheck by t h e i r emplcyer.
Natvrally,
i n t h e L a t t e r case t h e o a t a can be
o t t a i n e d and added t c t h e s t a t i s t i c s d e r i v e d
frorr inccrre t z x r e t u r n s ,
u s u a l Ly d i s p Lay Less d e t e i Ls and do n o t c c n t a i n such non-Labour
bcrt t h c y
incoce
conponentc as may be p r e s e n t .
There a r e a nunher o f d i f f e r e n c e s i n concept,
r o s t i ~ p o r t a n t . F i rst,
households.
non-profit
Thus,
t h e n a t i o n a t accounts c o n s o l i d a t e most f Lows between
i n t e r e s t payments between househotds,
i n s t i t u t i o n s s e r v i n z households,
n a t i o n a t accounts agcregates.
principle,
Ile r r e n t i o n j u s t s o m c f t h e
and so cn,
dcnations t o p r i v a t e
do n o t shcw up i n t h e
I n t h e t a x r e t u r n s they dc,
b u t f r e o u e n t l y n o t i n such
2
a t Least i n
wsy t h a t i t i s p o s s i b l e t o s e p a r a t e t h c
fLows w i t h i n t h e n a t i c n a t accounts h c u s e h c l d s e c t c r f r c r t h o s e t c and f r o t r
o t h e r sectors.
Secon?,
t h e n a t i o n a t acccunts add
i n c o r e t h a t a r e absent i n t a x r e t u r n s .
E
n u r b e r c f i t e s s t o househotd
An exaaple i s t h e i n c r e a s e i n t h e
a c t u a r i a l r e s e r v e s o f L i f e i n s c r a n c e s and p e n s i c n funds.
On t h c o t h e r hand,
a
number o f i t e m a r e added t o income i n t h e t a x r e t u r n s t h a t a r e n o t t r e s t e d as
such i n t h e n a t i o n a t accounts. An exar'ple i s pensions p a i d b y p e n s i c n func's.
Third,
a nurnber o f i t e m a r e v a l u a t e d i n a v e r y d i f f e r e n t wey by n a t i o n a t
accountants and t a x a u t h o r i t i e s .
dwellings;
An example i s t h e r e n t o f owner-occupied
n a t i o n a l accounts irrpute t h e market value and actuaL c o s t s whereas
t a x a u t h o r i t i c c f r e q u e n t l y employ a rruch lower f i c t i t i c u s r e n t and dc n o t
n e c e s s a r i Ly s u b t r â c t costs.
D i f f e r e n c e s i n s t a t i s t i c s l methodology rnay cause v e r y i ~ p o r t a n t
discrepancies.
There a r e s e v e r a l wethods f o r c o n p i l i n o t h e n a t i o n a l accounts
aggregate f o r household i n c m e .
Sorre c o v n t r i e s ercploy t h e i n c c r e method,
i s mainty based on i n c o n e t a x data.
which
I n t h a t case t h e b a s i c rcethodclocy of t h e
n a t i o n a l accounts and t h e incorre d i s t r i b u t i o n s t a t i s t i c s i s o f co1.-cc t h e sare;
b u t n a t i o n a l a c c o u n t a n t s check t h e i r e s t i r r a t e s a g a i n s t those f r o ~o t h e r
sources,
such as waqe d a t a f r o r corpany 2nd governrcent sources,
f r o m banks,
and so on;
i n t e r e s t data
t h e r e f o r e s t a t i s t i c a 1 differences w i t h the incove t a x
d a t a a r e c r e a t e d i n s p i t e o f t h e s i n i l a r i t y i n b a s i c wethoc'ology.
These
d i s c r e p a n c i e s a r e e x a c e r b a t e d i n c o u n t r i e s where n a t i o n a l a c c o u n t i n p a!x!recates
a r e compi l e d by means o f t h e p r o d u c t i o n method.
Thus,
i n t h e Metherlands the
commodity-f low method i s e r p l o y e d t o d e r i v e data on t h e o e n e r a t i o n of v a l u e
addec' fror: p r o d u c t i o n surveys.
The r e s u l t i n g e s t i v a t e o f v a l u e added i s t h e n
a l l o c a t e d t o t h e d i f f e r e n t sectors,
u s i n g v a r i o u s types o f datâ.
To sone
extent,
t h e p r i r r a r y incorre o f t h e houzehcld sector. i s a b a l a n c i n q i t e n i n t h i s
nethod,
l i n k e d o n l y Loosely t o income t a x based data.
R e l a t c d sources o f d i f f c r e n c e s are t ~ exv a s i o n and o t h e r b l a c k
activitics.
By d e f i n i t i o n ,
b l a c k inccrne does n o t show i n t h e t a x r e t u r n s a r d
hence n e i t h e r i n i n c o i e d i s t r i b u t i o n s t a t i s t i c s t h a t a r e d e r i v e d as a
s t r a i ~ h t f o r w a r dt a b u l 2 t i o n c f t h e t a x f o r r s .
contrast,
I n t h e n a t i c n a l accounts,
in
a s u b s t a n t i a l a r c u n t o f b l a c k a c t i v i t i e s and o f b l a c k income f Lows i s
t a k e n i n t o account.
T h i c i s p a r t i c u l a r l y t r u e if,
as e x p l a i n e d abcve,
the basic
~ e t h o d o l o o yf o r compi l i n g t h e a - c r e c a t e incowe o f t h e househcld s e c t o r i s n o t
t h e income method.
crop estimates,
Thus,
t h e D ~ ~ t cnha t i o n o l acccunts measure f a r n i n c c r e f r c r ;
v a l u e added i n c o n s t r u c t i o n t o a c o n s i d e r a b l c e x t e n t c n t h e
b a s i s of use of b u i l d i n g r a t c r i a l s ,
i n t e r e s t r e c e i p t s o f househotds on t h e
b a s i s o f d a t a on i n t e r e s t p a i d by banks,
and so ort.
I n each o f these cases
b l a c k i n c m e p a i d t c households i s i n c l u d e d i r r p l i c i t l y .
o f cases,
Poreover,
t h e r e i s e x p l i c i t ~ a c r o - i n f o m a t i o n on b l a c k income,
i n a nurnber
which i s
i n c l u d e d i n t h e accounts.
E l i m i n a t i n o t h e d i screpancies
The s u r v e y o f t h e m i n d i s c r e p a n c i e s between t h e a o c r e o a t e income o f t h e
household s e c t o r and t h e micro-data based on t a x r e t u r n s ,
w o u l d be v e r y d e s i r a b l e t o have a wel l - d e f i n e d
makes c l e a r t h a t i t
l i n k ~ o ebetween t h e tno.
n a t i o n a l acccuntc d a t a a r e more comprehensive and eaploy conccpts anc'
Thc
e v a t u a t i o n s t h s t a r e rrore u s e f u t f o r econotric anatysis;
rcoreover,
they are
c o n s i s t e n t w i t h i n c m e e s t i m a t e s f o r o t h e r s e c t o r s as wet1 as ~ i t phr o d u c t i o n
data. The micro-data,
on t h e o t h e r hand,
provide d i s t r i b u t i o n a t i n f o m a t i o n
t h a t i s absent f r o r t h e n a t i o n a t accounts,
Cne way t o irnprove t h e tinkage,
advocated by Ruggtes and Ruc?Les (1986) as
wel L as by Van Eochove and Van T u i n e n (19EG) 2nd Van Eochove and B loem (10C6)
i s t o a t t e r t h e n a t i o n a t accounts.
concerns t h e coverace @f
I n p a r t i c u t a r i n t u o respects.
t h e househo l d s e c t c r .
The f i r s t
Thus t l i e p r i v a t e non-prof it
i n s t i t u t i o n s s e r v i n g househotds s h o u t d be r e r o v e d frot t h e househotd s e c t o r .
I n
t h e 1968 e d i t i o n o f t h e UN System o f F l a t i o n a l Accounts (SNAI t h e s e a r e a
separate sector,
b u t i n t h e c u r r e n t r e v i s i o n o f t h e SKA t h e y w i k t be i n c t u d e d
i n t h e househotc s e c t o r again,
thouch as a separate subsectcr. The reason p i v e n
f o r t h i s i s t h e d i f f i c u l t y o f o b t a i n i n o separate data f o r t h e n o n - p r o f i t
i n s t i t u t i o n s . 8y t r e a t i n p t h e r as e s u b s e c t o r of t h e household sectcr,
o f a s e p a r a t e sector,
instetd
i t becomes more acceptabte t o c c n s o t i d a t e t h e ~w i t h
p r o p e r househot0s i f d a t a a r e absent.
T h i s i s a step i n t h e wrong d i r e c t i o n
f r o n t h e p o i n t o f view o f r i c r o - m a c r c
Linka9e;
p o i n t of view has beer? adapted.
i n t h e R e t h e r l a n d s t h e Rugcles'
One f u r t h e r s t e p i n t h e Same d i r e c t i o n i s t o
separate t h e househo tds w i t h an u n i n c c r p c r a t e e n t e r p r i se f rom t hose w i t h waoe
incowes o r t r a n s f e r incorrer cnty:
f o r t h c f o r r r c r c r c u p n p t i c n a l accounts end
income t a x concepts d i f f e r rrore w i d e t y t h a n
f c r t h e L a t t e r . Hence s e p a r a t i c n
i n t o separate sectors ivproves the linkane f o r the 'pure'
The seconò way t o i r p r c v e t h e v i c r o - n a c r o
a u t h c r s j u s t rentioned,
link,
householc' s e c t o r .
a l s c advccated by t h e
i s t o a t t e r a number o f n a t i o n a t accounts concepts i~
such a way t h a t t h e y conforrr r o r e c t o s e l y t o t h e r i c r o - c o n c e p t
income t a x data. Here,
w i t h i n a sector:
r e f lected i n the
one very i ~ p o r t s n ts t e p i s t o d e c o n s o l i d a t e income f t o w s
t h e i n c o ~ ef l o u s s h o u t d be d e f i n e d as t h e t o t a t r e c e i p t s o r
peynents o f t h e househotds,
i r r e s p e c t i v e o f whether t h e ftow i s between two
househotds o r between a househotd and a u n i t i n a n o t h e r s e c t o r .
This proposal
has been accepted by t h e e x p e r t p r o u p c o o r d i n a t i n c t h e r e v i s i c n o f t h e SNA.
Another exampte o f a conceptuat adjustrnent i s t o a t t e r t h e n a t i o n a t accounts
t r e a t m e n t o f i n c r e s s e s i n b c t h a c t u a r i a t reserves o f and benef i t s f r o ~t i f e
i n s u r a n c e s and p e n s i o n f u n d s i n o r d e r t o ccnform t o t h a t i n t h e micro-data.
T h i s r e d e f i n i t i o n o f rracro-concepts i n o r d e r t o achieve t i n k q e w i t h m i c r c concepts has a major drawback:
t h e r e d e f i n c d macro-concepts
Key w e l 1 be
inadeauate f r o r a macro-econmic p o i n t of view. T h e r e f o r e a s t r u c t u r e o f t h e
n a t i o n a t accounts i s r e q u i r e d t h a t c o n t a i n s b o t h viewpoints;
section 5 exptains
t h e approach t o t h i s probtem t h a t i s b e i n g devetoped by t h e CBS.
I d e a l ly,
r e d e f i n i t i o n o f rracro-concepts
leads t o an a g g r e ~ a t eincome f o r t h e
Aousehold s e c t o r t h a t i s c o n c e p t u a t l y c l o s e t o t h a t i n t h e micro-data.
f a r as concepts a r e concerned,
u n d e r l y i n g micro-data
Then,
3s
t h e p u b l i s h c d incorne d i s t r i b u t i o n d a t a o r t h e
c o u l d be used by a n a t y s t s o u t s i d e s t a t i s t i c a 1 o f f i c e s t o
d i s a o y e p a t e t h e n a t i o n a l accounts t o t a l .
Rugples and Ruogles (1986).
However,
approach i s s t i t l inadeouate,
T h i s i s t h e apprcach advocated by
t h e Dutch p o i n t o f view i s t h a t t h i s
because t h e two proups o f s t a t i s t i c a t
d i s c r e p a n c i e s t h a t were mentioned above a r e n c t t a k e n i n t o account.
c a t e g c r i e s o f income these d i s c r e p ~ n c i e sa r e sizeable,
b y Van d e r Laan and De Waard (1985).
tqoreover,
t h a t these d i s c r e p a n c i e s a r e ' n e u t r a t '
as shown i n
Fcr s o r e
2
CES s t u d y
t h e r e i s no reason t o assume
i n t h e sense t h a t t h e i r d i s t r i b c l t i o n
o v e r househotd o r i n d i v i d u a t s i s p r o p o r t i o n a t t c t b e d i s t r i b v t i o n c f t h e t a x
data.
Conseauent ly,
the
'true'
i n c o r e d i s t r i h u t i o n remainc hidden,
even i f t he
n a t i o n a l accounts coverage 2nd concepts a r e a t i y e d more c l o s e t y w i t h t h o s e of
t h e rricro-data.
T h i s reans t h a t t h e d i s t r i b u t i o n a l d a t a hsve t c be f u l l y
i n t e g r a t e d w i t h t h e n a t i o n a l accounts. A d d i t i o n a l i n f o r m a t i o n s h o u t d be used t o
achieve t h i s .
One example o f a d d i t i o n a t d a t a concerns b l a c k i n c m e f r o m
Labour. The CBS has conducted e x t e n s i v e surveys o f t h e l a t t e r ( c f .
Kazemier,
PP-
Ven E c k and
19E6); sorne o f t h e r c s u l t s c o u t d be used t o b r i d p e t h e n i c r c - r r a c r o
3.
I n d i v i d u a l benef it s o f c o l l e c t i v e e x ~ e n dt iu r e
Since t h e f i r s t systercs a f n a t i o n a l accounts were designed i n t h e l e t e 194C's,
t h e r o l e o f governrrent i n t h e economy has expanded c o n s i d e r a b l y . R a t i o n a l
áCiOUiiiS
have n o t y e t been a b l e t o c a t c h up. I m p l i c i t l y ,
t h e e x i s t i n ? systerns
o f n a t i o n a l accounts accomodate o n l y t h r e e main r o l e s o f ~ o v e r n r r e n t :
i) p r o v i d i n g. - ' p u r e ' c c l l e c t i v e poocis and s e r v i c e s
ii) e s t a b l i s h i n ? an e q u i t a b l e i n c o v e d i s t r i b u t i o n
iii)c a r r y i n 9 o u t i n d u s t r i a l and enployment p o l i c i e s .
Pure c o l l e c t i v e goods and s e r v i c e s a r e those c o m o d i t ies o f whi ch t h e benef it s
do n o t accrue t o s p e c i f i c i n d i v i d u a L s ,
b u t t o s c c i e t y as a whcle.
The c l a s s i c
example i s defense o u t l a y s . The n a t i o n a l accounts t a k e t h e p o i n t o f view t h a t
a l l ooods and s e r v i c e s produced by poverncent a r e p u r e l y c o l l e c t i v e :
a l 1 consurred by t h e covernment.
t h e y Ere
The second purpose of covernment i s e v i d e n t i n
t h e n a t i o n a l accounts i n t h e f o r v o f d i r e c t t a x e s snd s o c i a l w e l f a r e
c o n t r i b u t i o n s and ~ r a n t s . The t h i r d r o l e o f ~ o v e r n r r e n t i s v i s i b l e i n n a t i o n a l
accounts i n t h e f o r r of e.p.
I n t h e p a s t h a l f century,
subsidies t o industries.
however,
ooverncent has assumed another r o l e t h a t
has becore o f conside r a b l e i ~ p o r~t n c e : cont r c l lin? consumpt ion.
aspects t o t h i s r o l e .
f o r t h a t natter,
First,
There 2re t w c
c o v e r n r e n t m y consifier i t d e s i r a b l e t o r a i s e (or,
depress! n a t i o n a t c o n s u r p t i o n o f a croup o f occds o r s e r v i c e s
t o a l e v e l t h a t d i f f e r s f r m t h e one t h a t r e s u l t s i f t h e n a r k e t i s l c f t t o i t s
o m devices. Second,
t h e ~ o v e r n r e n ttray w i s h t o s t i n u l e t e consurrption o f a
group o f ~ c o d so r s e r v i c e s by s p e c i f i c groups of households,
i n order t c
achieve ari e o u i t a b l e d i s t r i b v t i o n o f c c n s u r p t i o n c f t h e c c ~ r i c dt ii e s concerned,
i n a d d i t i o n t o t h e pbrpose o f an e q u i t a b t c o v e r a l l income d i s t r i b u t i o n .
A wide ranoe o f i n s t r u r r e n t s has been developed t o a c h i e v e t h e s e censumption
policies.
itself;
Government Eay u n d e r t a k e t o produce t h e c o m o d i t i e s concerned by
i t may a l s a s u b s i d i z e t h e producers,
t r a n s f e r s o r by s a l e s - l i n k e d subsidies;
hauseholds,
e i t b e r by means o f lump-sur
i t ray route subsidies d i r e c t l y t o
f o r example i n t h e form o f r e i ~ b u r s e r e n tschemes.
i n s t ruments may o r may n o t have d i s t r i b u t i o n a l consequences.
Each o f these
Because t h e n a t i o n a l accounts do n o t e x p l i c i t l y o r i m p l i c i t l y i d e n t i f y t h e
consumpt ion-cant rol ling r o l e o f q o v e r n ~ e n t , it s e f f e c t s on ccmrrodi t y
consumption and on i t s d i s t r i h u t i o n a r e obfuscated.
T r a n s a c t i o n s t h a t a r e vade
f o r consumption c o n t r o l l i n ~purposes a r e t r e p t e d as thouph they s e r v e d one of
t h e o t h e r t h r e e purposes.
A p e r f e c t example i s t h e t r e a t m e n t of s u b s i d i e s on
r e n t e d d w e l l i n g s i n t h e Dutch system o f n a t i o n a l accounts.
types o f t h e s e s u b s i d i e s .
There a r e s e v e r a l
I n t h e n a t i o n a l accounts t h r e e groups a r e
d i s t i n g u i s h e d and each o f t h e s e i s t r e a t e d d i f f e r e n t l y .
First,
there are
c p e r a t i n c s u b s i d i e s f o r l e s s o r s of c e r t a i n c l a s s e s o f d w e l l i n g s ( p a r t i c u l a r l y
p a r t of t h e cheaper ones).
These a r e t r e a t e d as p r o d u c t i o n s u b s i d i e s .
t h e r e a r e s u b s i d i e s t o l e s s o r s when t h e y i n v e s t i n new d w e l l i n z s ;
t r e a t e d as c a p i t a 1 t r a n s f e r s . Third,
households,
these are
t h e r e a r e s ~ t ~ s i d i et sc i n d i v i d u a l
depending on t h e l e v e l c f t h e i r i n c o ~ eand on t h c i r rent;
t r e a t e d as s o c i a l w e l f a r e orants.
Second,
tlence,
these a r e
i n s p i t e o f the f a c t t h a t these three
groups o f t r a n s a c t i o n s can be c c n s i d e r e d t o have much t h e Same e f f e c t and,
dccree,
sense,
t h e sarre a i r (i.e.
incotre,
r s i s i n c c o n s i ~ r r p t i c no f housin9 s e r v i c e s anti,
o f s p e c i f i c socio-econornic
tc a
in a
eroups) t h e y a r e t r e a t e d q u i t e
d i f f e r e n t ly.
The conseauence o f t k e f a i l i i r e o f t h e n a t i o n a l acccunts t o r e c o c n i z e t h e
r o l e o f governrnent i n c o n t r o l l i n ? consurption,
i s t h a t t o t a l secondary i n c c r w
o f t h e household s e c t o r does n c t r e f l e c t t h e t o t a l v s l u e c f t h e ~ o o d r2nd
s e r v i c e s households can o b t a i n w i t h o u t borrowinc;
t h e l a t t e r i s t h e incotre
concept advccated by Hicks: hcw nuch can ycu r p e n l w i t h o u t b e i n o worse o f f e t
t h e end c f t h e p e r i o d .
Sirilarly,
t h e r o l e o f governeent i ~ p l i e st h a t t o t a l
hcusehold ccnsurnption does n a t r c p r e s e n t t h e t o t a l v a l u e o f t h e ~ o o d sand
s e r v i c e s t h a t a r e a c t c a l l y r a d e a v a i l a b l e t o i n d i v i $ u a l households.
Consequently,
two new c c n c e p t s a r e reauirec':
consumption of households.
t e r t i a r y incoae and t o t a l
These two concepts d i f f e r s u b s t a n t i a l l y f r o r t h e
t r a d i t i o n a l n a t i o n a l accounts concepts.
Two i n p o r t a n t d i f f e r e n c e s are:
i) A c o n s i d e r a b l e p a r t o f what i s now regarded as sovernment consumption does
n o t c o n s i s t of p u r e c o l l e c t i v e c o m o d i t i e s b u t o f c o m c o d i t i e s o f w h i c h t h e
benef i t s accrue t o s p e c i f i c h w s e h o l d s o r i n d i v i d u a l s .
education,
p u b l i c c u l t u r a l services,
ii) I n nany instances,
Examples a r e p u b l i c
p u b l i c h e a l t h services,
and s o on.
s u b s i d i e s t @p r i v a t e p r o d u c e r s a r e e s s e n t i a l l y
consumption s u b s i d i e s (e.p.
i n t h e case o f p u b l i c t r a n s p o r t ,
o f hcusino s u b s i d i e s e x p l a i n e d above).
i n t h e case
The n a t i o n a l accounts concept o f
hoitsehold consutrption i s d e f i n e d ' a t t r s r k e t p r i c e s ' .
Thil: Prrcunts t o t h e
p r o d u c e r s ' p r i c e l e s s t h e c o n s u v p t i o n subsidy.
Consequentty,
t h i s concept
o f c o n s u n p t i o n a t market p r i c e s underestimates t r u e consumption,
as i s
i m e d i a t e l y e v i d e n t i h t h e case o f two c o m o d i t i e s t h a t a r e r o r e o r Lesc
c l o s e s u b s t i t u t e s b u t o f which o n l y one i s subsidized.
As yet,
i t i s n o t y e t d e c i d e d p r e c i s e l y how t h e r e v i s e d Utl Systen of
n a t i o n a l accounts w i l l i n c o r p o r a t e t h e s e new concepts i n t h e accounts.
Tc
i n c o r p o r a t e therc c o m p l e t e l y w i l l r a i s e a h o s t o f problerrs: p r e c i s e l y which
oovernrent-produced
comrodi t i e s a r e a c t u a lt y non-col l e c t ive;
what i s t h e
d e l i n e s t i o n ( i f t h e r e i s any v e a n i n c f u l d e t i n e a t i o n a t a l l)between c o n s u r p t i o n
s u b s i d i e s and p r o d u c t i o n subsidies;
trainin'
should out lays of enterprises,
schenes and o t h e r f a c i lit i e s f o r employees,
househo Ld consurnption;
and so on. Moreover,
such as
a Lso be r e c l a s s i f i e d as
r e p l a c i n o t h e p r e s e n t concepts b y
t h e n o v e l ones would l c o s e t h e sare t i n k a a e between n i c r o ( t a x basedl-concepts
and nacro-concepts t h a t t h e c o n c e p t u a l changes d i s c y s s e d i n t h e p r e c e d i n c
s e c t i o n were desipned t o i r p r c v e . Once more,
approaches i n t h e systern,
Thus,
cf.
the s o l u t i o n i s t o i n t e c r s t e both
section 5.
r e c o p n i t i o n c f t h e r c l e o f aovernment i n c o n t r o l l i n c consumption has
c o n s i d e r a h t e i r p a c t on t h e n a t i o n a l accoclnts a c c r e ~ a t e s . I t has an even c r e a t e r
i r r p a c t on t h e d i s t r i b u t i o n o f i n c o r e between households: c o v e r n r e n t e x p e n d i t u r e
on each commodity and s u b s i d i e s b e n e f i t households w i t h s p e c i f i c socio-eccnomic
characteristics.
I n t h e Netherlands,
t h e C o c i a l and C v l t u r a l P t a n n i n c Pureov
has done research on these d i s t r i b u t i o n a t consequences ( c f .
e.p.
SCP,
l9Cl).
Usinc i n d i c a t o r s c f t h e use o f covernvent-produced a r -subs i d i z e d c c m o d i t i e s ,
c o v e r n ~ e n t e x p e n d i t u r e can be t t t r i b u t e d t o s p e c i f i c 'roups
o f households. Thus
e d u c a t i o n a t and c v l t u r a t e x p e n d i t u r e appears t o b e n e f i t p a r t i c u t a r l y hcusehctds
i n t h e upper income b r a c k e t s and (low income) s t u d e n t hcuseholds,
at leest i f
t h e (debatable) assurrption i s adopted t h a t e d u c z t i c n and c u t t u r a l p c t i v i t i e s
are non-collective
goods.
S o c i a l s e r v i c e s and h e a l t h care,
apparently b e n e f i t t h e lower i n c m e orwps.
The c 5 s t r i b u t i o n a l conseauences r a y
a l s o be a n a l y s e d f r o ~d i f f e r e n t p o i n t s o f view,
and o t h e r socio-democraphic
i n d i cators.
i n contrast,
such as hausehold ~ o r ~ p c s i t i o n
4.
D i s t r i b u t i o n a l i r p l i cationc o f i n f o r r r a l product i o n
I n p r e - i n d u s t r i a l and e a r l y i n d u s t r i a l s o c i e t i e s t h e r e i s a l a r g e i n f c r r r a l
economy: a s u b s t a n t i a 1 p a r t of t o t a l o u t p u t i s n o t s o l d f o r rrcney b u t rerrains
i n t h e household c r i s t r a d e d by b a r t e r .
This i s p a r t i c u l a r l y true f o r
a g r i c u l t u r a l p r o d u c t i o n and p r o c e s s i n g of p r i s a r y products. As t h e t e v e t of
development rises,
econory.
Thus,
t h i s i n f o r m a l p r o d i l c t i o n is y a c i u ö l l y drawn i n t c t h e farrra l
i n developed c o u n t r i e s almost a l 1 a g r i c u l t u r a l p r o d u c t i o n and
p r i m a r y p r o d u c t p r o c e s s i n ? i s sonetized.
imcomparabi l i t y
- of
developrrent
-
N a t u r a 1 ly,
t h i s deve topment l e a d s t o
o v e r t i m e and between c o u n t r i e s w i t h d i f f e r e n t l e v e l s of
n a t i o n a l incme,
c r o s s d o ~ e s t i cp r o d u c t and so on,
t a t t e r would i n c l u d e marketed p r c d u c t i o n onty.
Therefore,
i f the
i n t h e UN Systerr of
N a t i o n a t A c c o u ~ t st h i s i n f o r t r a l p r o d u c t i c n i s incluc!ed i n t o t e l p r o d u c t i o n ,
the
v ô l u a t i o n being a t the narket p r i c e of the equivalent prooucts t h a t are s o l d
f0r
Koney. S i r r i l a r t y ,
househoCd corrpariscns:
t h e more ' r u r a l '
t h e i n f o r m a l p r o d u c t i o n cannot he n e o l e c t e d i n i n t e r genera ll y speaking,
t h e h o u s e h c l d is,
t he lower it s v o n e t a r y i n c o r e and
t h e h i ~ h e ri t s i n f o r n a l p r c d u c t i o n ana' i t s
consumption c f these own-account products.
Consequently,
i n a sense,
p i c t u r e o f t h e d i s t r i b u t i o n o f consurrption and,
i n f o r n a l o u t p u t s h o u l d be t a k e n i n t o account.
to obtain a correct
o f incore,
the
T h i s i s p r e c i s e l y what i s done i n
t h e s o c i a l s c c o u n t i n p r a t r i c e s t h s t ? r e ncw becominc t h e r r z j o r s t a t i s t i c a t t o o t
f o r t h e d e s i c n o f development s t r a t e o i e s ano econcvic p o t i c i e s i n many
deve Lopi n? ccunt r i es.
Thouch i n f o r r a l a c r i c u l t u r a l p r o d u c t i c n i s i n s i c n i f i c a n t i n developed
count r i es,
o t h e r t y p e s o f informa L p r o d u c t i c n have becore much more i m p o r t a n t
i n r e c e n t decades.
This i s p a r t i c u l a r l y true o f do-it-yoursctf
activities. h
p l a u s i b l e e x p l a n a t i o n c f t h i s t r e n d i s t h e i n c r e a s e i n t a x r a t e s and t h e Level
of s o c i a l s e c u r i t y c o n t r i b v t i o n s .
T h i s i n c r e a s e has,
t o a c o n s i d e r a b l e depree,
chased r e p a i r and maintenance of d w e l t i n c s o u t o f t h e f o r n a l economy.
p r o c e s s has,
i n turn,
o e n e r a t e d new f o r s a l a c t i v i t i e s ,
p r o d u c t s f a c i l i t a t i n ~d o - i t - y o u r s e l f .
t e c h n o l o g i c a l inproveflent,
the production c f
and t h e i r p r a d u a l
r e p r e s e n t a form o f induced i n n o v a t i o n t h a t has nade
t h e s h i f t towards d o - i t - y o u r s e l f
Conseouent ly,
These products,
viz.
This
t h e p r c b tem o f
?
irreversible,
a t l e a s t t o a c e r t a i n extent.
c o n s i d e r a b l e i n f o r r a l p r o d u c t i o n w i t h i n t r i ca
l i n k a c e s w i t h f o r r a t p r o d u c t i o n i s h e r e t o stay.
This rakes i t imperstive t o
p r c v i d e an adeouate s t a t i s t i c a 1 d e s c r i p t i o n of t h i s t y p e c f i n f c r n a l
production.
Scmething s i r r i l a r appearc t o have happened i n case o f a n u ~ b e ro
services.
Examples a r e r e t a i l t r a d e services,
a d d i t i o n t o this,
and so on.
In
t h e r e a r e a nurcber o f s e r v i c e s which have atuays heen
produced by t h e household f o r it s own use:
c h i l d r e n and so on.
Moreover,
household a c t i v i t i e s ,
raisin?
t h e r e a r e a Lot o f i n t e r h o u s e h o t d s e r v i c e s t h a t
do n o t l e a d t o money f lows and are,
v o l u n t e e r uork,
laundry services,
consequent ly,
t o be conside r e d as i n f o r f i a L:
h e l p i n g n e i g h b o u r s and f a p i Ly w i t h s e v e r a t a c t i v i t i e s ,
and so
on. These a c t i v i t i e s have never been i n c l u d e d i n o f f i c i a l s t a t i s t i c s o n
p r o d u c t ion,
c o n s u ~ pi to n and income.
One reason f o r t h i s i s t h a t e c o n o r i c s t a t i s t i c s have been h e a v i t y i n f t u e n c e d
by economic theory;
as consurrers only,
i n a dcminant p a r t o f econonic t h e o r y households a r e viewed
n o t as prcducers.
The 1968 e d i t i o n c f t h e Stik d e p a r t e d f r o a
t h i s view by d e f i n i n 9 househotds i n s t i t u t i o n a t l y ,
i.e.
it included
u n i n c o r p o r a t e d e n t e r p r i ses i n t h e h c u s e h c l d s e c t o r f o r which income and o u t l a y
accounts a r e made. B u t t h e 1968 SIJA d i d n o t ?o a l t t h e way:
i n c o r e from forma1 household p r o d u c t i o n (i.e.
i t included cnly
that of uninccrporate
e n t e r p r i s e s ) and t h e t f r o p t h e L i r i t e d number o f i n f o r m a l a c t i v i t i e s i n d i c a t e d
above.
I n t h e 1970s t h e exc tcision c f i n f c r m a l p r o d u c t i o n carre t o he
criticized. Partially,
t h i s was caused by t h e i r i n c r e a s e d si'nificance,
p a r t i a l Ly by deve lopments i n e c o n o r i c t h e c r y . Thus,
t h e emergence o f t h e 'neig
home e c o n o ~ i c s ' Led t c an i n c r e a s i n p auareness o f t h e p r o d u c t i v e r o t e s c f
househclds.
T h i s c r i t i c i s m o f t h e n c t i o n a l x c o u n t s has,
hcwever,
n c t Led t o chenpes i n
t h e a c c c u n t s ' concepts. One i m p o r t a n t reascn f o r t h i s i s t h a t i t i s c u i t e
d i f f i c u l t t c decide upon t h e p r o p e r v a t u a t i o n o f i n f o r m a l s e r v i c e s . Py
definition,
they a r e n o t sold;
p r i c e - t a g f o r ther.
probterr i s easier,
hence t h e p a r k e t does n c t d i r e c t l y p r o v i d e
I n t h e case o f i n f o r s a t a p r i c u l t u r ? l p r o d u c t i o n t h i s
because goods t h a t e r e f u t l y corrparab l e t o those i n f c r r a L t y
produced a r e s o l d i n t h e narket.
forcer.
The p r i c c s o f t h e l a t t e r can be a p p t i e d t o t h e
I n t h e case o f i n f o r m a l l y produced s e r v i c e s t h i s approach i s more
troublesome.
Thouph i n many cases s e r v i c e s t h a t a r e s i m i l a r t c t h e i n f o r r n a t
ones a r e b e i n g s o l d i n t h e narket,
p r i c e f o r each s e r v i c e .
i t i s o f t e n n o t easy t o p i n down an e x a c t
T h i s probler,
o u t p u t o f forma1 services,
t h e measurement o f t h e ' q u a n t i t y ' o f
i s nou b e i n g t a c k l e d by economic s t a t i s t i c i a n s . The
b a s i c approach i s t o d e s i g n a d c t a i l e d c t a s s i f i c a t i o n o f s e r v i c e s f i r s t .
t h e t a t t e r has been e s t a b l i s h e d ,
f a r nore t r a c t a b l e .
Once
t h e p r o b t e n o f q u a n t i t i e s snd p r i c e s becores
I n t h e case o f i n f o r n a l s e r v i c e s t h e p r o b l e p i s t h e o t h e r
way around: q u a n t i t y i n f o r m a t i o n can be obtained,
c a l c u l a t e values.
b u t p r i c e s a r e neeoed t o
The developrrent o f a ' s e r v i c e s c l a s s i f i c a t i o n ' w i l 1
f a c i l i t a t e t h i s too,
p r o v i d e d t h e c l a s s i f i c a t i o n i s designed w i t h t h i s purpose
i n mind.
-
F o r t h e t i m e being,
however,
t h e change i n t h e v o l i m e o f f o r r r a l l y producec
s e r v i c e s i s c o s t l y measured by def l a t i n g t h e v a l u e o f t h e s e r v i c e s w i t h p r i c e s
of i n p u t s such as wane rates.
Conseoitently,
t h e o n l y way t o c a l c u l a t e t h e v a l u e
c f i n f o r m a l l y produced s e r v i c e s would be t o a s s i a n a v a l u e t c t h e anount of
l a b o u r t h e y i-eauire. But t h e l a t t e r would l e a d t o very a r b i t r a r y values,
because i t i s u n c l e a r which wage r a t e s s h o u l d be employed.
t h e r e s u l t i n 5 a-cregates,
use. To a v o i d t h i s ,
of production,
l i k e CDP and n a t i o n a l incore,
As a ccnsequence,
wout$ be o f l i s i t e d
n a t i o n a l a c c o u n t a n t s p r e f e r a more r e s t r i c t i v e d e l i n e a t i c n
even i n t h e case o f n c n - s e r v i c e i n f o r ~ a p
l rociucticn Like do-it-
ycurself a c t i v i t i e s .
Katurally,
t h i s 'solution'
and non-constant
t0
does n o t solve t h e problerc t h a t a c o n s i d e r a h l e
p a r t o f p r o d u c t i o n i s i n f o r c a l ano should be r e a s u r e d i n o r o e r
o b t a i n a cmprehensive picture.
d i s t r i b u t i c n a l p o i n t of view:
T h i s p r o b l e r i s even v o r e t r o u b l e s o r , e f r c r a
i t i s quite clear that i n f o r r a l prcduction i s not
u n i f c r m l y d i s t r i b u t e d over households.
t:cusehclds uhere a l l r e o b e r s have f o r ~ ts
jobs have l e s s t i m e a v a i l a b l e f o r inforrrial p r o d u c t i o n t h a n householcs cf which
e v e r y rember i s unerploye$;
t h e r e p r e s y r t e n a t i c v a r i ~ t i c n sc f i n f c r r a l
p r o d u c t i v e c a p a c i t y w i t h ace and o c c u p a t i o n a l s k i l l s ;
and so on. Ccnseouently,
cne may suspect t h c t .?cnuntirc f o r i n f o r ~ a l l yproduceci ~ o o d spnd s e r v i c e s leads
t o a d i f f e r e n t p i c t u r e o f t h e t c t a l a v s i l a b i l i t y c f coods and s e r v i c e s .
differentty,
Fut
t a k i n a zcccunt o f i n f c r r a l p r o d u c t i o n r a y Lead t o a d i f f e r e n t
income d i s t r i b u t i o n .
Thereforc,
p r c d u c t i o n p r e needed,
d i s a o o r e g a t e d c u a n t i t y d a t a en i n f c r n a l
even t houoh it r e n s i n s i r r p o s s i b te,
t r a n s f o r m thrm i n t 0 v a l u e e s t i n a t e s .
o r u n a d v i sab te,
I n t h e case o f services,
tc
these q u a n t i t y
d a t a w c u l d amount t o d a t a on t h e t i r e spcnt on t h e p r c d u c t i c n of a rsnpe o f
specific activities.
Such d a t a a r e absent i n t r a d i t i o n a l e c o n m i c s t a t i s t i c s .
Prcbably,
t h a t i n f o m a l p r o d u c t i o n i s n o t t a x e d has s o c e t h i n g t c do w i t h t h i s .
years,
hcwever,
o f time-budoet
n o r e i n f c r r r a t i o n has b e c c ~ ea v a i l a b Ce,
surveys:
surveys c f t h e way hcuseholos,
the f a c t
I n recent
dcie t o t h e developrrent
or individuals,
spenC
t h e i r t i ~ e . Rut u n f o r t u ~ a t e l y , r o s t t i m e - h u d ~ e t surveys ? r e n c t ~ e a r e dt c thc
measurement of i n f o r n a l p r o d u c t i o n and it s d i s t r i b u t i o n a l c h a r a c t e r i s t i c s .
Instead,
e.g.
t h e y f o c u s on t h e use o f t i m e as such and devote a l o t o f a t t e n t i o n t c
recreation.
W i t h such s wide focus,
one o b t a i n s c l a s s i f i c a t i o n s o f t i s e
use t h a t d i f f e r f r o v those t h a t a r e most s u i t a b l e when measurecent of i n f o m a t
p r o d u c t i o n i s t h e r r a i n purpose.
For example,
t i m e spent k n i t t i n c i n t h e w a i t i n -
room of a d o c t o r may be c l a s s i f i e d as ' w a i t i n g '
i n a general-purpose
survey b u t
s h o u l d be c l a s s i f i e d as ' k n i t t i n .g.' i n a survey geared t o measurinq p r o d u c t i o n .
Similarly,
t h e c l a s s i f i c a t i o n of households i n a o e n e r a l purpose survey nay
d i f f e r c o n s i d e r a f l y from t h e one r e q u i r e d f o r an a n ~ l y s i so f incone
distribution.
For t h i s reason,
t h e CBS has decided t o develop a i i n e - b u d c e t
survey t h a t i s e x p l i c i t l y d e s i g n e d t o c a p t u r e i n f o r r a l p r o d u c t i o n and i t s
d i s t r i b u t i o n a l input.
-
I n practice t h i s implies three thinos:
I n t h e case of r r u l t i p l e t i r r e m e ( ' k n i t t i n c
i n the w a i t i n c rcorr'l t h e t i n e
i s c l a s s i f i e d as p r o d u c t i v e as soon as one c f t h e a c t i v i t i e s ccncerned i s
productive.
-
The c t a s s i f i c a t i o n o f t i r e use i s such thzt,
as f a r as f e a s i b l e ,
c o m p a r a b i l i t y w i t h t h e Dutch v e r c i o n o f t h e I S I C i s a c h i e v e l w h i l e a t t h e
-
save t i v e t h e t y p e o f s e r v i c e o r cyod cap be i d e n t i f ied.
Households a r e c l a s s i f i e d such as t o a d a i t tinkage w i t h i n c c v e d i s t r i b u t i c n
d e t a u i t h i n a comprehensive f rarework c f i c c i a l ?nd e c c n o r i c sccount s.
5 . Households i n an i n t e g r a t e d meso-syster
f n each of t h e p r e c e d i n a s e c t i o n s we encountered cases where economic
s t a t i s t i c s a r e 'damned ift h e y do and d a m e d ift h e y d o n- ' t -' :
t h e conf l i c t i n ?
demands p l a c e d o n ~ a c r o - d a t a by ~ a c r o - e c o n o m i c t h e o r y and by t h e need f o r f f i c r o macro linkage;
by t h e l a t t e r and t h e need t o t a k e i n d i v i d u a l b e n e f i t s of
c o l l e c t i v e e x p e n d i t u r e i n t o acccunt;
and by t h e need t o know t h e impact of
i n f o r n a l p r o d u c t i o n on b o t h acgregates and income d i s t r i b u t i o n w i t h o u t s p o i l i n c
t h e i n t e r p r e t a b i l i t y o f t h e r e s u l t i n g concepts by a r b i t r a r y v a l u a t i o n s .
I n each
of t h e s e i n s t a n c e s t h e r e i s a danoer t h a t t h e d i f f i c u l t y o f c h o i c e leads
paralysis.
N o r i s c o a p r o a i z i n g an a l t e r n a t i v e option.
t0
The p r e s e n t S y s t e ~of
N a t i o n a l Accounts t a k e s t h i s r o u t e : sore i n f o r m a l p r o d u c t i o n i s i n c l u d e d ( t h i s
i s c a l l e d. - ' i a p u t a t i o n s ' ) ,
4. As a r e s u l t ,
as d i s c u s s e d i n s e c t i o n
t h e p r o d u c t i o n concept a c t u a l l y e ~ p l o y e di s n o t w e l 1 s u i t e d t o
d e a l w i t h t o t a l production,
production.
b u t rruch v o r e i s excluded,
S i m i larly,
b u t e q v a l l y unsuitable. f o r d e a l i n c w i t h f o r ~ a l
t h e p r e s e n t SKA r e r o u t e s a l o t o f i n c l o n e f lcws,
i n ways t h a t d i f f e r from t h e poney f l o w s ( t h i s
those r e l a t e d t o p e n s i o n funds,
i s called 'attributions'),
e.o.
b u t n e o l e c t s t o make a t t r i b u t i o n s t o show,
e.o.,
hcw
data,
but
much c c 1 l e c t i v e expen6i t u r e i s a c t u a l l y household consumpt ion. As a
conseauence,
t h e system i s n a t s u i t a b l e f o r l i n k a c e w i t h micro-incove
a l s 0 u n u s e f u l f o r s n a n s l y s i s o f a c t u a l household c o n s u ~ p t i o n .
Naturally,
i t i s n o t i n p o s s i b l e t o i n t e g r a t e a l 1 these p o i n t s o f view and
a l t e r n a t i v e concepts i n t o t h e s y s t e r .
unuieldy structure.
Therefore,
6 u t t h i s would r e s u l t i n an i n p c s s i b l y
t h e CES has proposed a m d u l a r y approach t o t h r
n 2 t i o n a l x c o u n t s end i s u o r k i n q on i t s f u t 1 developsent,
a i r i n ? t c sdopt i t
~ r a d u a l l y . I n t h i s approach t h e n a t i o n a l accounts a r e r e o r c a n i z e d i n t o a
'core'
and a s e t o f ' r o d u l e s ' .
The c o r e i s an i n s t i t u t i o n a l systev,
that i s a
systeng where concepts and v a l u a t i o n s a r e
-
-
c l o s e t o micro-concepts i n o r d e r t o a c h i e v e easy l i n k a g e w i t h t h t l a t t e r
c l o s e t o monetary f lows,
i n o r d e r t o a v o i d p r o b l e n s o f v a l u a t i o n and a c h i e v e
easy i n t e r p r e t a b i l i t y .
Conseauent ly,
t h e c o r e d i f f e r s s u b s t a n t i a 1 l y f ram t h e p r e s e n t s y s t e a o f
n a t i o n a l accounts,
p a r t i c u l a r l y i n it s t reatment o f households:
irriputations and no a t t r i b u t i c n s .
i t contains no
The core serves as t h e c o o r d i n a t i n g f ramework f o r a ( c o n s i d e r a b l e ) n u ~ b e rof
modules.
i t i s e s s e n t i a l t h a t t h e core has a w e l 1 d e f i n e d - ' r r e s o -
To t h i s end,
structure':
i n t h e c o n t e x t of t h e p r e s e n t paper,
s t r u c t u r e should be nentioned.
c5g
Production,
consunption,
two elements c f t h i s neso-
The f i r s t one i s t h e corrmodi t y c l a s c i f i c a t i o n .
fareiontrade i i t h - c o - a r e d e t a i l e d i n t o o n e
u n i f orm c o m o d i t y c l a s s i f i c a t i o n o f coods and s e r v i c e s by t h e i r nature.
The second e l e p e n t of t h e peso-st r u c t u r e t h a t i s r e l e v a n t here i s a breakdown
of househclds i n t 0 a ( n o t t o o l s r p e ) n u r b e r o f Froups. The c h o i c e of these
oroups should be rrade p r i m a r i l y f o r a n a l y t i c a 1 purposes and w i t h t h e
c o o r d i n a t i n o r o l e o f t h e c o r e i n vind.
c o n s t r u c t i o n i s irrportant.
Thus,
necd t o be i d e n t i f i e d separately,
I n addition,
t h e p o i n t o f view af d ~ t a
households w i t h an u n i n c o r p o r a t e e n t e r p r i s e
hecause i n f o r m a t i c n on t h e i r incowe i s
a v a i l a b l e i n b o t h p r o d u c t i o n surveys and i n income t a x data;
corrparing
these
may i n c r e a s e t h e a u a L i t y o f b o t h p r o d u c t i o n and income data.
S i r i larly,
a
breakdown o f households i n t o oroups u i t h d i s t i n c t l y ~ d i f f e r e n tconsumption
p a t t e r n s may i r p r c v e b o t b t h e d a t a on t h e i r ccnsvrrpticn
surveys
- and
comaodi t i e s .
-
based c n budcet
t h e e s t i m a t e o f n a t i o n a l consumption and p r o d u c t i o n o f s p e c i f i c
Therefcre,
the 'corc'
o f t h e n a t i c n a i accounts c o u i d eventue l l y
i n c l u d e a breakdown o f households i n t o some croups,
t h e i r c h o i c e detern;ined by
t h e p o s s i b i l i t i e s t o i n t e c r a t e d a t a frorr, v e r y d i f f e r e n t sources and by t h e
recuirernent t h a t t h e n a t i o n a l accounts p r o v i d e a corrprehensive d e s c r i p t i o n c f
t h e e c o n o ~ i cprocess. T h i s breakdown,
however,
view o f t h e uce o f t h e 6 i s a ~ p r e g a t e ddata.
a d d i t i o n t o t h e core.
i s t o o l i a i t e d f r o ~t h e p c i n t o f
Therefcre,
a module i s needed i n
T h i s r o d u l e c o n t a i n s s r u c h n o r e d e t a i l e d bre2kdown of
t h e household s e c t o r : by s o c i o - e c o n o r i c
secondary i n c c r e bracket,
~ n so
d on.
catecory,
type o f houschold,
primry or
T h i s breakdown i s a k i n t o t h e cne e s p l c y e d
i n s o c i a i a c c o u n t i n g p a t r i c e s . The c o r r p i l a t i o n o f i n c o r c d a t a f o r these c r o u p r
s t a r t s a t t h e acorepates f o r t h e hcusehold r r o u p s t o be d i s t i n c u i s h e d i n t h e
core,
and d i s a c p r e p a t e s t h e n on t h e b s s i s o f rricro-data f o r t h e householo
oroups concerned.
A second c o d u l e c o n t a i n s t h e i n f o r r a t i o n necessary t o r e c o r d
consurnption on t h e h a s i s o f t h e p r i n c i p l e of consumpticn by t h e b e n e f i c i a r y .
It
c o n t a i n s t h e Same conrrodi t y breekdown as t h e core 2nd t h e sare breakdown i n t 0
oroups o f households as t h e f ir s t module.
Consequent Ly,
t h i s 'consurnption by
t h e b e n e f i c i a r y ' r o d u l e shcws how nuch o f the v a l u e o f each c m m c d i t y producec!
o r subsi d i z e d b y covernvent i s a c t u a ll y consumed b y . each c r o u p o f households.
Thus,
t h i s module shovs t h e t e r t i a r y income d i s t r i b u t i c n .
A t h i r d module w i l 1 account f c r i n f o r r r a l p r o d u c t i o n and c o n s u ~ p t i o no f t h e
goods and s e r v i c e s concerned.
breakdown as t h e core.
i t s i n f o r c a l production.
Once mcre i t w i l 1 employ t h e Same comrriodi t y
For each conmodity i t shows hou rwch t i m e i s spend on
Then,
f o r each c o m o d i t y ,
b o t h consumption f r o c format
p r o d u c t i o n ( i n m n e y terms) and f r c r i n f o r m a l p r o d u c t i o n ( i n Labour t i r . e l a r e
c.
:n.
Naturally,
t h i s module once a g a i n c o n t a i n s t h e sawe h a i s e h o l d groups as
t h e two modules mentioned before.
Conseouently,
an i n d i c a t i o n o f t h e impact of
i n f o r m a l p r o d u c t i o n on income d i s t r i b u t i o n i s i m e d i a t e l y obtained.
Some
a l t e r n a t i v e v a l u a t i o n m a s u r e s c o u l d be added and an unarbiouous v a l u a t i o n may
become p o s s i b l e once a s e r v i c e c l a s s i f i c a t i o n has been developed,
Taken toqether,
cf.
s e c t i o n 4.
these t h r e e modules f o r w a s y s t e ~o f s o c i o-econorrti c
accounts t h a t p r o v i d e s a complete d e s c r i p t i o n o f t h e d i s t r i b u t i o n o f income,
both prirary,
secondary,
t e r t i a r y and ' i n f o r c a l ' ,
as w e l 1 as a c o r p l e t e
d e s c r i p t i c n c f t h e d i s t r i b u t i o n o f c o n s ~ r ~ p t i o n s, a v i n g and so on.
c o w p i l a t i o n o f a f i r s t v e r s i o n o f such
version,
P
s y s t e n ~i$
beinp f i n a l i z e d .
c o n t a i n i n c about 4C household Frcups,
t h r e e modules d e s c r i b e d ahovc.
A t present,
This f i r s t
i s s i m i l a r t o t h e f i r s t of t h e
I t i s i n t e q r a t e d w i t h t h e present n a t i o n a l
accounts acoregates s i n c e t h e complete r e s t r u c t u r i n g i n t o a ~ c d u l a r ys y s t e r
r e o u i r e s a f a i r l y Lonp p e r i o d o f t i r e .
Ref e rences
Kin?,
Grecory (1696) N a t u r a 1 and p o l i t i c a l observat i o n and c o n c l u s i o n s upon
t h e s t a t e pnd c o n d i t i o n o f Enpland. And: Of t h e n a v a l t r a d e o f Enpland
- -' t h e
Ru'gles,
R.
n a t i o n a l p r o f i t a r i s i n p thereby.
and N.D.
Ruggles (1986) The i n t e g r a t i o n o f macro and m i c r o d a t a f o r
t h e household sector,
Review of Income anc' klea l t h,
32,
245-376.
S o c i a a l en C u l t u r e e l Planbureau (1981) P r o f i j t van ae o v e r h e i d i n 1977.
Staatsuitceverij,
Van Bcchovc,
C.A.
Den Haag.
snd A.K.
of t k e b a s i c options,
Van Bochove,
C.A.
and H.K.
Rloen: (1986) The s t r u c t u r e o f t h e n e x t P!SA: r e v i e w
S t a t i s t i c a 1 J o v r n s l o f t h e U n i t e d t ! a t i o n s ECE,
van T u i n e n (1966) F l e x i b i l i t y i n t h e n e x t SKA: t h e
case f o r an i n s t i t u t i o n a l core,
Van der Laan,
P.
and J.b!.P.
Review o f I n c m e and I ' e a l t h ,
Van Eck,
127-154.
de Waard (1985) V e r g e l i j k i n a t u s s e n de Inkonens-
s t a t i s t i e k en oe N a t i o n a l e rekenincen,
Staatstuit-everij,
22,
S t a t i s t i s c h e Cnde r z o e k i n c e n 1'26,
Den Haac.
R. and P. Kazemier (1986) F e ~ t u r e so f t h e hidden e c o n m y i n t h e
Netherlands,
R ~ t i o n a Accounts
l
C!ccasional pPper NA C15,
CES,
Voorburp.
Available National Accounts Occasional Pa~ers
NA/Ol
Flexibility in the system of National Accounts, Eck, R. van,
C.N. Gorter and H.K. van Tuinen (1983)
This~tTer sets out some of the main ideas of what gradually
developed int0 the Dutch view on the fourth revision of the SNA. In
particular it focuses on the validit and even desirability of the
inclusion of a number of carefully cgosen alternative definitions
the "Blue Book" and the organization of a flexible s stem starting
from a core tha; is easier to understand than the 196% SNA.
NA/02
The unobserved economy and the National Accounts in the Netherlands,
a sensitivity analysis, Broesterhuizen, G.A.A.M. (1983)
This paper studies the influence of fraud on macro-economie
statistrcs, especially GDP. The term "fraud" is used as meaning
unreporting or underreporting income (e.g. to the tax authorities).
The conclusion of the analysis of rowth figures is that a bias in
the growth of GDP of more than 0 . 5 f is very unlikely.
NA/03
Secondary activities and the National Accounts: Aspects of the Dutch
measurement practice and its effects on the unofficial economy,
Eck, R. van (1985)
In the process of estimatin national product and other variables in
the National Accounts a numger of methods is used to obtain initia1
estimates for each economic activit These methods are described
and for each method various possibilities for distortion are
considered.
NA/04
Comparability of input-out ut tables in time, Al, P.G. and
G .A.A.M. Broesterhuiren (1685)
In this paper it is argued that the comparability in time of
statistics, and in ut-output tables in particular, can be filled in
in various ways. &e wa in which it is filled depends on the
structure and object of the statistici concerned. In this respect
it is important to differentiate between coordinated input-output
tables, in which groups of units (industries) are divided int0
rows and columns, and anal tical input-output tables, in which the
rows and columns refer to Komogeneous activities.
NA/05
The use of chain indices for deflatin the National Accounts, Al,
P.G., B.M. Balk, S. de Boer and G.P. %en Bakker (1985)
This paper is devoted to the problem of deflatin National Accounts
and input-output tables. This problem is approacf? ed from the
theoretical as wel1 as from the practica1 srde. Althou h the
theoretical argument favors the ure of chained vartia-8 indices,
the current practice of compilating National Accounts restricts to
using chained Paasche and Laspeyres indices. Various possible
objections to the use of chained indices are discussed and rejected.
NA/06
Revision of the system of National Accounts: the case for
flexibility, Bochove, C.A. van and H.K. van Tuinen (1985)
This paper examines the purposes of the SNA and concludes that they
frequent1 conflict with one another. Consequently, the structure of
the SNA s8ould be made more flexible. This can be achieved by means
of a system of a eneral purpose core supplemented with s ecial modules
This core is a fufl-fledged detailed rystem of National Accounts
with a greater institutionai content than the present SNA and a more
elaborate description of the economy at the meso-level. The modules
are more analytic and reflect special purposes and specific
theoretical views. It is argued that future revisions wil1 concentrate
on the modules and that the core is more durable than systems like
present SNA.
NA/07
Integration of input-out ut tables and sector accounts; a possible
solution, Bos, C. v.d. ( 985)
In this aper, the establishment-enterprise or company problem is
tackled
taking the institutional sectors to which the establishments
belong int0 account during the construction of input-output
tables. The extra burden on the construction of input-output tables
resulting from this approach is examined for the Dutch situation. An
adapted sectoring of ~nstitutionalunits is proposed for the
construction of input-output tables. The proposed approach contains
perspectives on further specification of the institutional sectors,
gy
P
households and non-financial enterprises and quasi-corporate
enterprises.
NA/08
A note on Dutch National Accounting
- data 1900-1984, Bochove, C.A.
van (1985)
This note rovides a brief survey of Dutch national accounting data
for 1900-1684,concentrating on national income. It indicates where
these data can be found and what the major discontinuities are. The
note concludes that estimates of the level of national income may
contai~'naccuracies; that its growth rate is measured accurately
for t h ~ .riod since 1948; and that the real iricome grbi~thiate
series for 1900-1984 may contain a systematic bias.
NA/09
The structure of the next SNA: review of the basic options, Bochove,
C.A. van and A.M. Bloem (1985)
There are two basic issues with respect to the structure of the next
version the UN System of National Accounts. The first is its 'size ' :
reviewing this issue, it can be concluded that the next SNA must be
'large ' in the sense of containin an integrated meso-economic
statistical system. It is essentiaf that the next SNA contains an
institutional system without the im utations and attributions that
pollute present SNA. This can be ackieved by distinguishing, in the
centra1 system of the next SNA, a core (the institutional system), a
standard module for non-market production and a standard module
describing attributed income and consumption of the household
sector.
NA/10
Dual sectoring in National Accounts, Al, P.G. (1985)
The economic process consists of various sub-processes, each
requiring its own characteristic classification when described from a
statistica1 point of view. In doing this, th'e interfaces linking the
sub-systems describing the individual processes must be charted in
order to reflect the relations existing within the overall process.
In this paper, this issue is examined with the s ecial refernce to
dual sectoring in systems of National Accounts. eollowing a
conceptual explanatlon of dual sectoring, an outline is given of a
statistica1 system with complete dual sectoring in which the
linkages are also defined and worked out. It is shown that the SNA 1968
is incomplete and obscure with respect to the links between the two
sub-processes.
NA/11
Backward and forward linkages with an a plication to the Dutch agroindustrial complex, Harthoorn, R. (1985i
Some industries induce production in ot er industries. An elegant
method is developed for calculating forward and backward linka es
avoiding double counting. For 1981 these methods have been appfied
to determine the influence of Dutch agriculture in the Dutch economy
in terms of value added and labour force.
NA/12
Production chains, Harthoorn, R. (1986)
This pa er introduces the notion of production cains as a measure
of the Rierarchy of industries in the production process. Production
chains are sequences of transformation of products by successive
industries. It is possible to calculate forward transformations as
wel1 as backward ones.
NA/13
The simultaneous compilation of current rice and deflated inputoutput tables, Boer, S. de end G.A.A.M. groesterhuizen (1986)
This pa er discusses a number of aspects of the procedure according
to whrck in ut-out ut tables are compiled in the Netherlands. A few
years ago tRis metgod undewent an essential revision. The most
significant improvement means that during the entire statistica1
process from the processsing and anal sis of the basic data up to
and inciuding the phase of balancin tKe tables, data in current prices
and deflated data are obtained simuftaneousiy and in consistency
with each other. Data in current prices first used to be compiled and
data in constant prices and changes in volume and prices used to be
estimated only afterwards. With the new method the opportunity for
the analysis of the interrelations between various kinds of data, and
thus better estimates is used.
NA/14
A proposal for the synoptic structure of the next SNA, Al, P.G. and
C.A. van Bochove (1986)
Features of the hidden economy in the Netherlands, Eck, R. van and
B. Kazemier (1986)
This pa er presents curve results on the size and structure of the
hidden fabour market in tXe Netherlands.
Uncoverin hidden income distributions: the Dutch approach, Bochove,
C.A. van $1987)
Nain national accounting series 1900-1986,Bochove, C.A. van and
T.A. Huitker (''"7)
The main nationú~accountin series for the Netherlands, 1900-1986,
are provided, along with a Brief explanation.
The Dutch economy, 1921-1939 and 1969-1985. A comparison based on
revised macro-economic data for the interwar period, Bakker, G.P. den,
T . A . Huitker and C.A. van Bochove (1987)
Constant wealth national income: accounting for war damage with an
a plication to the Netherlands,1940-1945,Bochove,C.A. van and
van Sorge (1987)
8
The micro-meso-macrolinkage for business in an SNA-compatible
system of economic statistrcs, Bochove, C.A. van (1987)
Micro-macro link for govemment, Bloem, A.M. (1987)
This paper describes the way the link between the statistics on
overnment finance and national accounts is provided for in the
Butch government finance statistics.
Some
extensions of the static open Leontief model, Harthoorn, R.
/l OQ7\
\ A701 /
The results of input-output analysis are invariant for a
transformation of the system of units. Such transformation can be
used to derive the Leontief rice model, for forecasting inputoutput tables and for the cayculation of cumulative factor costs.
Finall the series expansion of the Leontief inverse is used to
descri e how certain economic processes are spread out over time.
i:
Compilation of household sector accounts in the Netherlands
National Accounts, Laan, P. van der (1987)
This a er provides a concise description of the way in which
housegoed sector accounts are compiled within the Netherlands
National Accounts. Special attention is paid to differences
with the recommendations in the United Nations System of
National Accounts (SNA).
On the adjustment of tables with Lagrange multipliers, Harthoorn, R.
and J. van Dalen (1987)
Än efficient variant of the Lagrange method is given, which uses no
more computer time and centra1 memory then the widely used RAS
method. Also some special cases are discussed: the adjustment of row
sums and column s m s , additional restraints, mutual connections
between tables and three dimensional tables.
Re uests for copies of National Accounts Occasional Papers should be
adjressed to:
CBS, National Accounts Department
P.O. Box 959
2270 AZ Voorburg
The Netherlands