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Informal Care and Employment in England: Evidence from the British Household Panel Survey

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  • Heitmueller, Axel

    ()
    (Cabinet Office, UK)

  • Michaud, Pierre-Carl

    ()
    (University of Québec at Montréal)

Abstract

More than 40% of the respondents in the British Household Panel Survey provide informal care at least for one year within the period 1991-2003 and carers are usually less likely to hold simultaneously a paid job. There is little evidence on the mechanism that links informal care provision and labour market outcomes. This paper provides evidence on the pathways through which this pattern arises using a multivariate dynamic panel data model that accounts for state-dependence, feedback effects and correlated unobserved heterogeneity. We find evidence of a causal link from informal care to employment with employment rates reduced by up to 6 percentage points. However, this effect is only found for co-residential carers who account for one third of the population of carers and less than 5 percent of the overall labor force. For the same group, a significantly smaller link from employment to care provision is found. A micro-simulation exercise using the model estimates suggest that the overall potential pressure on the provision of informal care created by a rise in the employment rate is minimal.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2010.

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Length: 57 pages
Date of creation: Mar 2006
Date of revision:
Publication status: published as "A dynamic analysis of informal care and employment in England" (with Zafar Nazarov) in: Labour Economics, 2010, 17 (3), 455-465
Handle: RePEc:iza:izadps:dp2010

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Keywords: aging; employment dynamics; informal care; dynamic panel data models;

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References

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  1. Ilmakunnas, Seija & Pudney, Stephen, 1990. "A model of female labour supply in the presence of hours restrictions," Journal of Public Economics, Elsevier, vol. 41(2), pages 183-210, March.
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  4. R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
  5. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  6. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-38, July.
  7. Carmichael, Fiona & Charles, Sue, 1998. "The labour market costs of community care1," Journal of Health Economics, Elsevier, vol. 17(6), pages 747-765, December.
  8. Chamberlain, Gary, 1984. "Panel data," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 22, pages 1247-1318 Elsevier.
  9. Alessie, R.J.M. & Hochgürtel, S. & Soest, A.H.O. van, 2001. "Ownership of Stocks and Mutual Funds: A Panel Data Analysis," Discussion Paper 2001-94, Tilburg University, Center for Economic Research.
  10. 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.
  11. Dean R. Hyslop, 1999. "State Dependence, Serial Correlation and Heterogeneity in Intertemporal Labor Force Participation of Married Women," Econometrica, Econometric Society, vol. 67(6), pages 1255-1294, November.
  12. Arulampalam, W., 1998. "A Note on Estimated Coefficients in Random Effects Probit Models," The Warwick Economics Research Paper Series (TWERPS) 520, University of Warwick, Department of Economics.
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Cited by:
  1. Elisabeth Fevang & Snorre Kverndokk & Knut Røed, 2012. "Labor supply in the terminal stages of lone parents’ lives," Journal of Population Economics, Springer, vol. 25(4), pages 1399-1422, October.
  2. Fevang, Elisabeth & Kvrendokk, Snorre & Røed, Knut, 2009. "Informal Care and Labor Supply," HERO On line Working Paper Series 2008:8, Oslo University, Health Economics Research Programme.
  3. Laura Crespo, 2006. "Caring For Parents And Employment Status Of European Mid-Life Women," Working Papers wp2006_0615, CEMFI.
  4. Bridget Hiedemann & Michelle Sovinsky & Steven Stern, 2011. "Will You Still Want Me Tomorrow? The Dynamics of Families’ Long-Term Care Arrangements," Working Papers 2012-017, Human Capital and Economic Opportunity Working Group.
  5. Michelle Goeree & Bridget Hiedemann & Steven Stern, 2011. "Will You Still Want Me Tomorrow? The Dynamics of Families' Long-Term Care Arrangements," Working Papers 2011-035, Human Capital and Economic Opportunity Working Group.
  6. David Casado-Marín & Pilar García-Gómez & Ángel López-Nicolás, 2008. "Labour and income effects of caregiving across Europe: an evaluation using matching techniques," Health, Econometrics and Data Group (HEDG) Working Papers 08/23, HEDG, c/o Department of Economics, University of York.
  7. Emmanouil Mentzakis & Paul McNamee & Mandy Ryan, 2009. "Who cares and how much: exploring the determinants of co-residential informal care," Review of Economics of the Household, Springer, vol. 7(3), pages 305-305, September.
  8. Michelle Sovinsky & Steven Stern, 2012. "Dynamic Modelling of Long-Term Care Decisions," Working Papers 2012-019, Human Capital and Economic Opportunity Working Group.
  9. Michelle Sovinsky & Steven Stern, 2013. "Dynamic modelling of long-term care decisions," ECON - Working Papers 113, Department of Economics - University of Zurich.
  10. Ciani, Emanuele, 2012. "Informal adult care and caregivers' employment in Europe," Labour Economics, Elsevier, vol. 19(2), pages 155-164.

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