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Lifting the Burden: State Care of the Elderly and Labor Supply of Adult Children


  • Loken, Katrine Vellesen

    () (Norwegian School of Economics)

  • Lundberg, Shelly

    () (University of California, Santa Barbara)

  • Riise, Julie

    () (University of Bergen)


In this paper, we use a 1998 reform in the federal funding of local home-based care for the elderly in Norway to examine the effects of formal care expansion on the labor supply decisions and mobility of middle-aged children. Our main finding is a consistent and significant negative impact of formal care expansion on work absences longer than 2 weeks for the adult daughters of single elderly parents. This effect is particularly strong for daughters with no siblings, and this group is also more likely to exceed earnings thresholds after the reform. We find no impacts of the reform on daughter's mobility or parental health, and no effects on adult sons. Our results provide evidence of substitution between formal home-based care and informal care for the group that is most likely to respond to the parent's need for care – adult daughters with no siblings to share the burden of parental care. These results also highlight the importance of labor market institutions that provide flexibility in enabling women to balance home and work responsibilities.

Suggested Citation

  • Loken, Katrine Vellesen & Lundberg, Shelly & Riise, Julie, 2014. "Lifting the Burden: State Care of the Elderly and Labor Supply of Adult Children," IZA Discussion Papers 8267, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp8267

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    References listed on IDEAS

    1. Michael Baker & Jonathan Gruber & Kevin Milligan, 2008. "Universal Child Care, Maternal Labor Supply, and Family Well-Being," Journal of Political Economy, University of Chicago Press, vol. 116(4), pages 709-745, August.
    2. Adriaan Kalwij & Giacomo Pasini & Mingqin Wu, 2014. "Home care for the elderly: the role of relatives, friends and neighbors," Review of Economics of the Household, Springer, vol. 12(2), pages 379-404, June.
    3. Claudia Goldin, 2014. "A Grand Gender Convergence: Its Last Chapter," American Economic Review, American Economic Association, vol. 104(4), pages 1091-1119, April.
    4. Leigh, Andrew, 2010. "Informal care and labor market participation," Labour Economics, Elsevier, vol. 17(1), pages 140-149, January.
    5. Fevang, Elisabeth & Kverndokk, Snorre & Røed, Knut, 2008. "Informal Care and Labor Supply," IZA Discussion Papers 3717, Institute for the Study of Labor (IZA).
    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. Stabile, Mark & Laporte, Audrey & Coyte, Peter C., 2006. "Household responses to public home care programs," Journal of Health Economics, Elsevier, vol. 25(4), pages 674-701, July.
    8. Heitmueller, Axel & Inglis, Kirsty, 2007. "The earnings of informal carers: Wage differentials and opportunity costs," Journal of Health Economics, Elsevier, vol. 26(4), pages 821-841, July.
    9. Markussen, Simen & Røed, Knut & Røgeberg, Ole J. & Gaure, Simen, 2011. "The anatomy of absenteeism," Journal of Health Economics, Elsevier, vol. 30(2), pages 277-292, March.
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    Cited by:

    1. Johannes Geyer & Thorben Korfhage, 2015. "Long-Term Care Reform and the Labor Supply of Household Members: Evidence from a Quasi-Experiment," SOEPpapers on Multidisciplinary Panel Data Research 785, DIW Berlin, The German Socio-Economic Panel (SOEP).
    2. 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.
    3. Heger, Dörte & Korfhage, Thorben, 2016. "Care choices in Europe: To each according to his needs?," Ruhr Economic Papers 649, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.

    More about this item


    formal and informal care; elderly; welfare state; women's career;

    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

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