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Time to care? The effects of retirement on informal care provision

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  • Fischer, Björn
  • Müller, Kai-Uwe

Abstract

This paper analyzes the impact of women's retirement on their informal care provision. Using SOEP data, we address fundamental endogeneity problems by exploiting variation in the German pension system in two complementary ways. We find a significant effect of retirement on informal care provision, when using early retirement age thresholds as instruments. Heterogeneity analyses confirm the underlying behavioral mechanism, a time conflict between labor supply and informal care. We further exploit a sizable increase in the early retirement age for German women and find that affected women provide less non-intensive care. High intensity care is not impacted, which leads to a double burden and potentially negative health effects for caregivers. Exploiting the policy reform, we find evidence supporting the notion that formal care is no substitute for informal care. This implies that less overall care is received, which can be damaging to the health of the recipients of care.

Suggested Citation

  • Fischer, Björn & Müller, Kai-Uwe, 2020. "Time to care? The effects of retirement on informal care provision," Journal of Health Economics, Elsevier, vol. 73(C).
  • Handle: RePEc:eee:jhecon:v:73:y:2020:i:c:s0167629619306071
    DOI: 10.1016/j.jhealeco.2020.102350
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Chris Sampson’s journal round-up for 5th October 2020
      by Chris Sampson in The Academic Health Economists' Blog on 2020-10-05 11:00:05

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    More about this item

    Keywords

    Retirement; Informal care; Regression discontinuity; Age threshold; Pension reform;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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