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Informal home care and labor-force participation of household members

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  • Annika Meng

Abstract

In Germany, informal home care is preferred to professional care services in the public discussion as well as in legal care regulations. However, only minor importance is ascribed to the opportunity costs caregivers face. Therefore, this article explores the influence home care has on the labor supply of caregivers who cohabitate with the care recipient. I use data from the German Socio-Economic Panel from 2001 to 2007, which allows researchers to merge the characteristics of both groups for the first time. Owing to diverging gender roles, I examine female and male caregivers separately. The results show that having an individual in need of care in the household does not decrease labor supply to an economically relevant quantity. As providing care might be endogenous to the labor-supply decision, I test for endogeneity by using characteristics of care recipients as instruments and I additionally test for sample attrition. Moreover, the panel structure allows me to control for unobserved heterogeneity. Copyright Springer-Verlag 2013

Suggested Citation

  • Annika Meng, 2013. "Informal home care and labor-force participation of household members," Empirical Economics, Springer, vol. 44(2), pages 959-979, April.
    • Handle: RePEc:spr:empeco:v:44:y:2013:i:2:p:959-979
    DOI: 10.1007/s00181-011-0537-1
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    More about this item

    Keywords

    Informal care; Labor supply; Endogeneity; J14; J22; D64;
    All these keywords.

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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