UNECE OECD EUROSTAT Group of Experts on National Accounts Expanded Accounts for the Household Sector Discussant comments Michael Connolly May 2014

It’s about households OECD What’s going on within the household sector? Statistics Netherlands

Common Themes Papers highlight limitations of the existing statistics when trying to understand h/holds Not without its challenges – Adjustments for imputations by quintile Underreporting by quintile NL and OECD follow similar approach Method A, B C (data, imputation, pro rata) Calibration of overall micro totals to macro totals NL present distribution across h/hold composition rather than OECD presentation of quintiles

Overview OECD Omnibus paper Breakdown of Household Income, consumption, saving and Wealth Link micro with macro – enhanced integration To allow distributional analysis across households in the economy - understand impact of policy – Quintiles – Sources of income – Household categories

Rationale - It’s all about inequality Stiglitz Sen Fitoussi Varying degrees of economic wellbeing across households Uneven distribution of income Uneven ability to absorb economic shocks

Comparison of micro data and National Accounts totals Distribution of income consumption and saving

OECD – Step 1 - Measurement and comparison of Income Consumption and Wealth Use of Adjusted Disposable Income - incl transfers in kind Use of a Gap indicator as a measure of mismatch Gap of 36% for ADI - after taking into account quantifiable differences - gap reduced to 18% Significant divergence in either measure Imputations in SNA, under coverage in micro surveys sub populations

OECD - Step 1 - Comparison of micro data and National Accounts totals Micro- macro comparisons between 80% - 120% OK Interest - Distributed income of Corporations and income from self employed - poor Seem to be comparing different years for different countries together Comparison between National micro source and IDD may also relate to different years - eg saving for 2006/7: NZ -3% and 2009/10: +16% AU

Step 2 - Distribution of Income, Consumption and Savings 3 breakdowns - Income quintiles, – main sources of income – and household types – 16 countries for 2008/2009/2010 Inconsistencies in results for Income and consumption – flatter profile for consumption Negative savings is the consequence Review of PIH and LCH : students and pensioners in 1 st quintile No conclusive results use of H of H/Hold data Non - observed income excluded from micro?

Statistical Issues/Dashboard 6 indicators ADI – and GDP COE & Mixed Inc of h/hold sector %GDP Income redistribution Net saving rate H/Hold indebtedness Unemployment

Netherlands Paper Rather than quintile analysis – Household category – Age of head h/hold – Household composition : couple with children, single woman etc – Standard of living – Main source of income Disparity index – detail of analysis (h/hold composition) Ratio Highest to lowest Overall directions of inequality – for Income and consumption is down but up for wealth

Ageing Society This is not an issue for Households but individuals Generational perspective - level of individual National Transfer Accounts Wealth not considered Doesn’t appear to make use of Pension Claims statistics Concepts of income and consumption differ somewhat HBS difficult to align to individual members of H/hold How are transfers between h/holds recorded

Ageing society Link known average consumption expenditure to h/holds classified by h/hold composition Allocate average amount across members of h/hold using an equivalence scale - depending on scale used different results obtained Importance of flows within h/holds Linking between registers enabled h/hold – individual, approach used in both projects

Questions for Authors Par 26 & 30 NL paper “disposable income and wealth is greatest for couples with children” Although there appears to be some data linking in NL paper - is there more scope? Statistical or economic analysis is this appropriate for NSIs ? Conclusions are seemingly tentative / experimental what is required to improve quality of estimates? Would it be better to concentrate on households exclusively rather than individuals / households as Institutional Units? Both approaches present the results differently – NL allows some time series perspective but loses cross section analysis by quintile – OECD vice-versa are there other presentational proposals

EEA Household Sector Accounts ECB NPISH in the Canadian System of National Accounts Statistics Canada

Discussants comments - EEA Steep learning curve for non-expert users !! Very useful overview of Single Currency Area Highlights incipient household problems - property/lending Overall integrated framework - do we miss the non-financial balance sheets and valuation?

Canadian NPISH Accounts - comments Excellent practical description of how to compile NPISH sequence of accounts Emphasis on starting point - establish the universe - vital Data sources for Register building informative The key elements of NPISH expenditure and income are highlighted Good detail on data sources - similar to other countries

Questions Is the financial corporations element of what was “persons and unincorporated businesses sector” excluded from the new NPISH - presumably “yes” There is an increase in Financial assets as a proportion of total assets and a decrease in non-financial assets??? Is the establishment of foundations for receipt of donations /govt. transfers regulated In relation to the increased contribution of Govt. transfers to NPISH income - are these increased transfers concentrated in areas like health/eduction?