IT’S ABOUT HOUSEHOLDS
Group of Experts on National Accounts Meeting
Geneva, 7 -9 May 2014
Jennifer Ribarsky
Head of Section
Sectoral and National Accounts
OECD
Why emphasize households?
• Stiglitz, Sen, Fitoussi commission on the
Measurement of Economic Performance
and Social Progress
– 5 out of 12 recommendations in the report
deal with household issues
• G-20 data gaps initiative
– Recommendation 16: “OECD should … link
national accounts data with distributional
information”
2
Work stream on distribution information
• Measuring distribution of income and
consumption within a national accounts
framework
– OECD-Eurostat Expert Group on Disparities
in National Accounts (EG-DNA)
– OECD Informal Expert Group on
Distributional Information on Household
Income, Consumption, and Savings (EGDNA2)
3
Work of EG-DNA (first group)
• Compared micro and macro data sources on household
income, consumption, and wealth to better understand
similarities and divergences between them.
• Allocation of national account totals to groups of
households using a range of micro sources; derivation of
disparity measures on income, consumption and saving,
for a given year; with national estimates following an
agreed template and methodology
• Eurostat « a-minima exercise » for EU27
4
Main benefits EG-DNA
• Sharing knowledge across countries and between micro
and macro experts
• A better understanding of the differences between
national accounts and micro survey concepts and
compilation procedures
• Compilation of experimental data and disparity
measures across households groups consistent with NA
estimates:
– three breakdowns:
household type, main source of income, income quintiles
– based on common templates and methodology
5
Adjusted disposable income by quintiles
3.5
France 2003
3.0
2.5
2.0
Italy 2008
Korea 2009
Mexico 2010
Netherlands 2008
New Zealand 2006-07
1.5
Slovenia 2008
United States 2010
1.0
0.5
0.0
Q1
Q2
Q3
Q4
Q5
6
Relative position of the 20% richest
households to the 20% poorest households
22
20
18
16
14
12
10
8
6
4
2
0
Slovenia 2008 France 2003
Netherlands
2008
Korea 2009
New Zealand
2006-07
Italy 2008
United States Mexico 2010
2010
7
Actual final consumption by quintiles
3.5
France 2003
3.0
2.5
Korea 2009
Mexico 2010
Netherlands 2008
2.0
New Zealand 2006-07
Slovenia 2008
1.5
United States 2010
1.0
0.5
0.0
Q1
Q2
Q3
Q4
Q5
8
Savings* as a percentage of
adjusted disposable income
60%
40%
20%
Australia 2009-10
0%
France 2003
-20%
Korea 2009
-40%
Mexico 2010
Netherlands 2008
-60%
New Zealand 2006/07
Slovenia 2008
-80%
United States 2010
-100%
Q1
Q2
Q3
Q4
Q5
*Difference between adjusted disposable income and actual final consumption plus the change in
net equity of households in pension funds.
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Aggregate gross household saving rates
1993-2012
2011
2009
2007
2005
Hungary
Japan
Mexico
Poland
United Kingdom
2003
2011
.00
2009
-.10
2007
.05
2005
-.05
2003
.10
2001
.00
1999
.15
1997
.05
1995
.20
1993
.10
1993
.25
2001
New Zealand
.15
1999
Estonia
1997
Belgium
Italy
Korea
Netherlands
Slovak Republic
.30
1995
.20
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Possible reasons for negative savings
• Economic theories of consumption
– Milton Friedman’s Permanent Income Hypothesis (PIH)
– Modigliani and Brumberg’s Life Cycle Hypothesis (LCH)
• Statistical issues
– Impact of transfers between households
– Income related to the non-observed economy
– Inconsistent responses (case of France)
– Imperfect quintile allocation of households for
consumption components
– Imputations related to owner occupied dwellings
11
Transactions and transfers between
households of different quintiles
Impact of transfers between households on saving rates
positive values refer to higher saving rates after transfers were taken into account
difference of saving rates before and after
transfers between households
Q1
Q2
Q3
Q4
Q5
Australia
-0.1%
0.1%
0.5%
0.2%
-0.2%
France
2.6%
0.7%
0.4%
-0.4%
-1.1%
Korea
0.5%
0.7%
-0.6%
-0.7%
0.4%
Netherlands
-1.6%
0.8%
0.5%
0.2%
-0.3%
Unites States
-2.2%
0.0%
0.2%
0.1%
0.0%12
OECD work using data on households
• Household dashboard
– Make use of more timely institutional sector
accounts
– Primary focus on quarterly data
• Drivers of differences between GDP and
Household Adjusted Disposable Income
– Paper to be presented at OECD’s Working
Party on National Accounts meeting in
November 2014
13
Household dashboard
• Dashboard on household economic resources using an
indicator approach
• Possible indicators to include
– Real household adjusted disposable income
– Compensation of employees (and possibly mixed income)
as a share of GDP
– Household income redistribution-> ratio of adjusted
disposable income to primary income
– Household savings rate
– Household indebtedness ratio
– Unemployment rate
14
Drivers of difference between GDP and
HH adjusted disposable income
135
130
125
120
115
110
105
100
95
EURO AREA
Adj.disposable income
135
130
125
120
115
110
105
100
95
UNITED STATES
135
130
125
120
115
110
105
100
95
GDP
Adj.disposable income
JAPAN
135
130
125
120
115
110
105
100
95
Adj.disposable income
GDP
GDP
CANADA
Adj.disposable income
GDP
15
Thank you for your attention!
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