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The effect of informal care on work and wages

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Author Info

  • Van Houtven, Courtney Harold
  • Coe, Norma B.
  • Skira, Meghan M.

Abstract

Cross-sectional evidence in the United States finds that informal caregivers have less attachment to the labor force. The causal mechanism is unclear: do children who work less become informal caregivers, or are children who become caregivers working less? Using longitudinal data from the Health and Retirement Study, we identify the relationship between informal care and work in the United States, both on the intensive and extensive margins, and examine wage effects. We control for time-invariant individual heterogeneity; rule out or control for endogeneity; examine effects for men and women separately; and analyze heterogeneous effects by task and intensity. We find modest decreases—2.4 percentage points—in the likelihood of working for male caregivers providing personal care. Female chore caregivers, meanwhile, are more likely to be retired. For female care providers who remain working, we find evidence that they decrease work by 3–10hours per week and face a 3 percent lower wage than non-caregivers. We find little effect of caregiving on working men's hours or wages. These estimates suggest that the opportunity costs to informal care providers are important to consider when making policy recommendations about the design and funding of public long-term care programs.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Health Economics.

Volume (Year): 32 (2013)
Issue (Month): 1 ()
Pages: 240-252

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Handle: RePEc:eee:jhecon:v:32:y:2013:i:1:p:240-252

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Web page: http://www.elsevier.com/locate/inca/505560

Related research

Keywords: Informal care; Labor force participation; Hours; Wages;

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References

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  1. Michaud, Pierre-Carl & Heitmueller, Axel & Nazarov, Zafar, 2010. "A dynamic analysis of informal care and employment in England," Labour Economics, Elsevier, vol. 17(3), pages 455-465, June.
  2. Heitmueller, Axel & Inglis, Kirsty, 2007. "The earnings of informal carers: Wage differentials and opportunity costs," Journal of Health Economics, Elsevier, vol. 26(4), pages 821-841, July.
  3. Norma B. Coe & Courtney Harold Van Houtven, 2009. "Caring for mom and neglecting yourself? The health effects of caring for an elderly parent," Health Economics, John Wiley & Sons, Ltd., vol. 18(9), pages 991-1010.
  4. Bolin, K. & Lindgren, B. & Lundborg, P., 2008. "Your next of kin or your own career?: Caring and working among the 50+ of Europe," Journal of Health Economics, Elsevier, vol. 27(3), pages 718-738, May.
  5. Van Houtven, Courtney Harold & Norton, Edward C., 2008. "Informal care and Medicare expenditures: Testing for heterogeneous treatment effects," Journal of Health Economics, Elsevier, vol. 27(1), pages 134-156, January.
  6. Hassink, Wolter & van den Berg, Bernard, 2011. "Time-Bound Opportunity Costs of Informal Care: Consequences for Access to Professional Care, Caregiver Support, and Labour Supply Estimates," IZA Discussion Papers 5433, Institute for the Study of Labor (IZA).
  7. Carmichael, Fiona & Charles, Susan, 2003. "The opportunity costs of informal care: does gender matter?," Journal of Health Economics, Elsevier, vol. 22(5), pages 781-803, September.
  8. Heitmueller, Axel, 2004. "The Chicken or the Egg? Endogeneity in Labour Market Participation of Informal Carers in England," IZA Discussion Papers 1366, Institute for the Study of Labor (IZA).
  9. Hiedemann, Bridget & Stern, Steven, 1999. "Strategic play among family members when making long-term care decisions," Journal of Economic Behavior & Organization, Elsevier, vol. 40(1), pages 29-57, September.
  10. Michele Wilson & Courtney Houtven & Sally Stearns & Elizabeth Clipp, 2007. "Depression and Missed Work among Informal Caregivers of Older Individuals with Dementia," Journal of Family and Economic Issues, Springer, vol. 28(4), pages 684-698, December.
  11. Susan L. Ettner, 1996. "The Opportunity Costs of Elder Care," Journal of Human Resources, University of Wisconsin Press, vol. 31(1), pages 189-205.
  12. Douglas Staiger & James H. Stock, 1994. "Instrumental Variables Regression with Weak Instruments," NBER Technical Working Papers 0151, National Bureau of Economic Research, Inc.
  13. Susan Ettner, 1995. "The impact of “parent care” on female labor supply decisions," Demography, Springer, vol. 32(1), pages 63-80, February.
  14. David Byrne & Michelle S. Goeree & Bridget Hiedemann & Steven Stern, 2009. "Formal Home Health Care, Informal Care, And Family Decision Making," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(4), pages 1205-1242, November.
  15. Carmichael, Fiona & Charles, Sue, 1998. "The labour market costs of community care1," Journal of Health Economics, Elsevier, vol. 17(6), pages 747-765, December.
  16. Laura Crespo & Pedro Mira, 2010. "Caregiving To Elderly Parents And Employment Status Of European Mature Women," Working Papers wp2010_1007, CEMFI.
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Citations

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Cited by:
  1. Nguyen, Ha Trong & Connelly, Luke Brian, 2014. "The effect of unpaid caregiving intensity on labour force participation: Results from a multinomial endogenous treatment model," Social Science & Medicine, Elsevier, vol. 100(C), pages 115-122.
  2. Meghan Skira, 2013. "Dynamic Wage and Employment Effects of Elder Parent Care," 2013 Meeting Papers 79, Society for Economic Dynamics.
  3. M. Lippi Bruni & C. Ugolini, 2013. "Delegating home care for the elderly to external caregivers? An empirical study on Italian data," Working Papers wp905, Dipartimento Scienze Economiche, Universita' di Bologna.
  4. Konstantin Kehl & Stephan Stahlschmidt, 2013. "A new perspective on the economic valuation of informal caare: The well-being approach revisited," SFB 649 Discussion Papers SFB649DP2013-035, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  5. Emily E. Wiemers & Suzanne Bianchi, 2014. "Sandwiched between Aging Parents and Boomerang Kids in Two Cohorts of American Women," Working Papers 2014_06, University of Massachusetts Boston, Economics Department.
  6. Jacobs, Josephine C. & Laporte, Audrey & Van Houtven, Courtney H. & Coyte, Peter C., 2014. "Caregiving intensity and retirement status in Canada," Social Science & Medicine, Elsevier, vol. 102(C), pages 74-82.

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