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Informal home care and labor-force participation of household members

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  • Annika Meng

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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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    References listed on IDEAS

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    1. Steven Stern, 1995. "Estimating Family Long-Term Care Decisions in the Presence of Endogenous Child Characteristics," Journal of Human Resources, University of Wisconsin Press, vol. 30(3), pages 551-580.
    2. Liliana E. Pezzin & Barbara Steinberg Schone, 1999. "Intergenerational Household Formation, Female Labor Supply and Informal Caregiving: A Bargaining Approach," Journal of Human Resources, University of Wisconsin Press, vol. 34(3), pages 475-503.
    3. Heitmueller, Axel, 2007. "The chicken or the egg?: Endogeneity in labour market participation of informal carers in England," Journal of Health Economics, Elsevier, vol. 26(3), pages 536-559, May.
    4. Christine L. Himes & Ulrike Schneider & Douglas A. Wolf, 2001. "The Dynamics of Long-Term Care Service Use in Germany," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 70(1), pages 153-158.
    5. Fiona Carmichael & Susan Charles, 2003. "Benefit payments, informal care and female labour supply," Applied Economics Letters, Taylor & Francis Journals, vol. 10(7), pages 411-415.
    6. Susan Ettner, 1995. "The impact of “parent care” on female labor supply decisions," Demography, Springer;Population Association of America (PAA), vol. 32(1), pages 63-80, February.
    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. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
    9. 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.
    10. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP) – Scope, Evolution and Enhancements," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 127(1), pages 139-169.
    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. 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.
    13. repec:zbw:rwirep:0203 is not listed on IDEAS
    14. Keese, Matthias & Meng, Annika & Schnabel, Reinhold, 2010. "Are You Well Prepared for Long-term Care? – Assessing Financial Gaps in Private German Care Provision," Ruhr Economic Papers 203, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
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    Citations

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    Cited by:

    1. Heger, Dörte & Korfhage, Thorben, 2017. "Does the negative effect of caregiving on work persist over time?," Ruhr Economic Papers 703, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    2. 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.
    3. Kaschowitz, Judith, 2015. "Der Einfluss der Pflegeverantwortung von Frauen auf das Arbeitsangebot ihrer Partner: Eine Untersuchung mit dem SOEP," Duisburger Beiträge zur soziologischen Forschung 2015-01, University of Duisburg-Essen, Institute of Sociology.
    4. repec:eee:joecag:v:6:y:2015:i:c:p:89-101 is not listed on IDEAS
    5. Niimi, Yoko, 2017. "Does Providing Informal Elderly Care Hasten Retirement? Evidence from Japan," AGI Working Paper Series 2017-07, Asian Growth Research Institute.
    6. Nishimura, Y.; Oikawa, M.;, 2017. "Effects of Informal Elderly Care on Labor Supply: Exploitation of Government Intervention on the Supply Side of Elderly Care Market," Health, Econometrics and Data Group (HEDG) Working Papers 17/02, HEDG, c/o Department of Economics, University of York.
    7. Geyer, J.; Korfhage, T.;, 2017. "Long-term care reform and the labor supply of informal caregivers – evidence from a quasi-experiment," Health, Econometrics and Data Group (HEDG) Working Papers 17/20, HEDG, c/o Department of Economics, University of York.
    8. Jacobs, Josephine C. & Van Houtven, Courtney H. & Laporte, Audrey & Coyte, Peter C., 2015. "Baby Boomer caregivers in the workforce: Do they fare better or worse than their predecessors?," The Journal of the Economics of Ageing, Elsevier, vol. 6(C), pages 89-101.
    9. Edwin van Gameren & Durfari Velandia Naranjo, 2015. "Working and Caring: The Simultaneous Decision of Labor Force Participation and Informal Elderly and Child Support Activities in Mexico," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 52(2), pages 117-148, November.
    10. Mazzotta, Fernanda & Bettio, Francesca & Zigante, Valentina, 2018. "And Thou Shalt Honor: children’s caregiving, work and religion," GLO Discussion Paper Series 202, Global Labor Organization (GLO).
    11. Schmitz, Hendrik & Westphal, Matthias, 2015. "Short- and medium-term effects of informal care provision on female caregivers’ health," Journal of Health Economics, Elsevier, vol. 42(C), pages 174-185.
    12. Judith Kaschowitz, 2015. "Der Einfluss der Pflegeverantwortung von Frauen auf das Arbeitsangebot ihrer Partner: eine Untersuchung mit dem SOEP," SOEPpapers on Multidisciplinary Panel Data Research 780, DIW Berlin, The German Socio-Economic Panel (SOEP).

    More about this item

    Keywords

    Informal care; Labor supply; Endogeneity; J14; J22; D64;

    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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