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Caregiving Subsidies and Spousal Early Retirement Intentions

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  • Costa-Font, Joan

    (London School of Economics)

  • Vilaplana-Prieto, Cristina

    (Universidad de Murcia)

Abstract

Balancing caregiving duties and work can be both financially and emotionally burdensome, especially when care is provided to a spouse at home. This paper documents that financial respite for caregivers can influence individuals' early retirement decisions. We examine the effect of a reform extending long-term care (LTC) benefits (in the form of subsidies and supports) in Spain after 2007 on caregiving spouse's early retirement intention. We subsequently examine the effect of austerity spending cuts in 2012 reducing such publicly funded benefits, and we compare the estimates to the effects of an early retirement reform among private sector workers in 2013. We document evidence of a 10pp reduction in the early retirement intentions after the LTC reform even though the effect is heterogeneous by type of benefit. Consistently, austerity spending cuts in benefits are found to weaken retirement intentions. Our estimates suggest that cuts in caregiving subsidies exert a much stronger effect on early retirement intentions than actual early retirement reforms.

Suggested Citation

  • Costa-Font, Joan & Vilaplana-Prieto, Cristina, 2022. "Caregiving Subsidies and Spousal Early Retirement Intentions," IZA Discussion Papers 15339, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp15339
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    Cited by:

    1. Costa-Font, Joan & Jiménez-Martín, Sergi & Vilaplana-Prieto, Cristina, 2022. "Do Public Caregiving Subsidies and Supports affect the Provision of Care and Transfers?," Journal of Health Economics, Elsevier, vol. 84(C).

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    More about this item

    Keywords

    caregiving subsidies; informal care; retirement; employment; long-term care; home care;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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