Abstract

Comparisons of household inequality between Europe and the United States usually rely on money incomes. Yet living standards also depend on public services, such as childcare, schooling and healthcare, and on unpaid work that households do for themselves, such as cooking, cleaning and caring for family members. Public in-kind services are worth about 25 percent of national income in both Europe and the United States (Blanchet, Chancel and Gethin 2022), while unpaid household work is worth 15–26% of GDP across the G7 (van de Ven, Zwijnenburg and De Queljoe 2018), Countries combine these sources very differently, so money-income comparisons can conflate differences in inequality with differences in how care is organized.

Distributional national accounts allocate all national income, including taxes and public spending, across the population. But leading estimates omit unpaid work and share out non-health public services in proportion to income. Statistical offices now value unpaid household work in satellite accounts, but only as national aggregates.

The 2025 System of National Accounts recommends distributional accounts and invites extending them with unpaid household service work, yet no study has combined the two consistently across countries. As recognised in the 2025 SNA, this question is particularly timely as governments redraw the boundary between public and family care. Who gains from public spending on childcare or health depends on who uses the services and on how much market-provided or family care they replace.

This paper builds distributional national accounts with household production for 15 European countries and the United States. Combining large income surveys (the EU-SILC for Europe and the CPS-ASEC for the US) with time-diary surveys (the HETUS and ATUS, respectively), it reconciles survey incomes with national accounts and tax records, credit public services to the people who use them, and adds the value of unpaid household work.

Survey top incomes are adjusted to tax records, income that surveys miss is added, and each income type is scaled to national-accounts totals. Public spending is credited (as far as possible) to users (e.g., childcare spending goes to parents; long-term care and social housing to recipients). Each adult’s hours of housework, active childcare and adult care are predicted from diary-based regressions by country and sex and valued at replacement cost (housekeepers’ median wage). Preliminary imputations of on-call or supervisory childcare are also included in a comparable manner for the US and Europe.

The accounts measure material living standards, not welfare: they count only work someone else could be paid to do, excluding leisure. The paper compares inequality from survey money income through pre-tax and post-tax national income to post-tax income with household production. It will show how far markets, the state and families each shape inequality in living standards in Europe and the United States. Where families (southern Europe) or the state (the Nordic countries) provide relatively more care, inequality measured by money income significantly overstates inequality in material living standards; where both provide less (the United States), the two measures are closer together.