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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.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1366.

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Length: 25 pages
Date of creation: Oct 2004
Date of revision:
Handle: RePEc:iza:izadps:dp1366
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  1. Bell, David & Heitmueller, Axel, 2009. "The Disability Discrimination Act in the UK: Helping or hindering employment among the disabled?," Journal of Health Economics, Elsevier, vol. 28(2), pages 465-480, March.
  2. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2002. "Instrumental variables and GMM: Estimation and testing," North American Stata Users' Group Meetings 2003 05, Stata Users Group.
  3. 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).
  4. Tania Burchardt, 2003. "Being and becoming: Social exclusion and the onset of disability," CASE Reports casereport21, Centre for Analysis of Social Exclusion, LSE.
  5. 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.
  6. Liliana Pezzin & Barbara Schone, 1999. "Parental marital disruption and intergenerational transfers: An analysis of lone elderly parents and their children," Demography, Springer, vol. 36(3), pages 287-297, August.
  7. 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.
  8. Carmichael, Fiona & Charles, Sue, 1998. "The labour market costs of community care1," Journal of Health Economics, Elsevier, vol. 17(6), pages 747-765, December.
  9. Susan L. Ettner, 1996. "The Opportunity Costs of Elder Care," Journal of Human Resources, University of Wisconsin Press, vol. 31(1), pages 189-205.
  10. Susan Ettner, 1995. "The impact of “parent care” on female labor supply decisions," Demography, Springer, vol. 32(1), pages 63-80, February.
  11. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
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