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Informal Care and Employment in England: Evidence from the British Household Panel Survey

  • Heitmueller, Axel

    ()

    (Imperial College London)

  • Michaud, Pierre-Carl

    ()

    (University of Québec at Montréal)

More than 40% of the respondents in the British Household Panel Survey provide informal care at least for one year within the period 1991-2003 and carers are usually less likely to hold simultaneously a paid job. There is little evidence on the mechanism that links informal care provision and labour market outcomes. This paper provides evidence on the pathways through which this pattern arises using a multivariate dynamic panel data model that accounts for state-dependence, feedback effects and correlated unobserved heterogeneity. We find evidence of a causal link from informal care to employment with employment rates reduced by up to 6 percentage points. However, this effect is only found for co-residential carers who account for one third of the population of carers and less than 5 percent of the overall labor force. For the same group, a significantly smaller link from employment to care provision is found. A micro-simulation exercise using the model estimates suggest that the overall potential pressure on the provision of informal care created by a rise in the employment rate is minimal.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2010.

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Length: 57 pages
Date of creation: Mar 2006
Date of revision:
Publication status: published as "A dynamic analysis of informal care and employment in England" (with Zafar Nazarov) in: Labour Economics, 2010, 17 (3), 455-465
Handle: RePEc:iza:izadps:dp2010
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  1. Arulampalam, W., 1998. "A Note on Estimated Coefficients in Random Effects Probit Models," The Warwick Economics Research Paper Series (TWERPS) 520, University of Warwick, Department of Economics.
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  7. R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
  8. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-38, July.
  9. Dean R. Hyslop, 1999. "State Dependence, Serial Correlation and Heterogeneity in Intertemporal Labor Force Participation of Married Women," Econometrica, Econometric Society, vol. 67(6), pages 1255-1294, November.
  10. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
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