Correct Option
The correct option is 1 and 2 only.
Explanation
In National Income Accounting, the calculation of Gross National Product (GNP) and Gross Domestic Product (GDP) generally relies on market transactions where goods and services are exchanged for money. Activities that do not involve monetary exchange, often referred to as non-market transactions, present challenges in estimation and inclusion.
Statement-wise Analysis
- Statement 1 is Correct: Standard national income accounting conventions (such as the System of National Accounts) exclude unpaid domestic work performed by women (or men) from GNP calculations. This is because these services-such as cooking, cleaning, and child-rearing-are produced and consumed within the household without a market transaction, making their monetary valuation difficult and subjective.
- Statement 2 is Correct: Many economists and international bodies argue that unpaid domestic work constitutes a significant portion of productive activity. It supports the "care economy" and the reproduction of the labor force. Excluding it underestimates the true economic production and welfare of a nation. Therefore, there is a strong economic argument that such work should be recognized as economic activity.
- Statement 3 is Incorrect: The current "narrow definition" of work (which focuses primarily on paid or market-oriented employment) leads to the exclusion of women engaged solely in domestic duties from the workforce statistics. Consequently, this leads to an underestimation (not overestimation) of the number of women workers and their contribution to the economy. If the definition were broader, the recorded number of women workers would increase.
Key Takeaway: Unpaid household work is treated as a non-market transaction and is excluded from National Income data, which results in the underestimation of the female workforce participation rate and the total economic output.