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The Chicken or the Egg? Endogeneity in Labour Market Participation of Informal Carers in England


  • Heitmueller, Axel

    () (Imperial College London)


Informal care is a vital pillar of the British welfare state. A well-known fact in the small economic literature on informal care is the apparent negative relation between care responsibilities and labour market participation. Yet, caring and labour market participation may be endogenous. Using an instrumental variable approach and data from the British Household Panel Study for 2002 this paper shows that not accommodating for endogeneity in the labour market participation equation may significantly underestimate the impact care exhibits on the employment decision of informal carers. This is the more the case the smaller the choice of becoming a carer. Policy implications are derived.

Suggested Citation

  • Heitmueller, Axel, 2004. "The Chicken or the Egg? Endogeneity in Labour Market Participation of Informal Carers in England," IZA Discussion Papers 1366, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp1366

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    References listed on IDEAS

    1. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2003. "Instrumental variables and GMM: Estimation and testing," Stata Journal, StataCorp LP, vol. 3(1), pages 1-31, March.
    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.
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    6. 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.
    7. Heitmueller, Axel & Inglis, Kirsty, 2004. "Carefree? Participation and Pay Differentials for Informal Carers in Britain," IZA Discussion Papers 1273, Institute for the Study of Labor (IZA).
    8. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
    9. Carmichael, Fiona & Charles, Sue, 1998. "The labour market costs of community care1," Journal of Health Economics, Elsevier, vol. 17(6), pages 747-765, December.
    10. Susan L. Ettner, 1996. "The Opportunity Costs of Elder Care," Journal of Human Resources, University of Wisconsin Press, vol. 31(1), pages 189-205.
    11. Tania Burchardt, 2003. "Being and becoming: Social exclusion and the onset of disability," CASE Reports casereport21, Centre for Analysis of Social Exclusion, LSE.
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    More about this item


    labour market participation; endogeneity; informal care; instrumental variable approach;

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General


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