Informal care and long-term labor market outcomes

Schmitz, Hendrik; Westphal, Matthias

doi:10.1016/j.jhealeco.2017.09.002

Cited by 82 publications

(51 citation statements)

References 39 publications

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“…This would require reducing significantly our sample size, with a risk of selection bias. Second, the exogeneity of the child's economic situation is a source of concern because income and wealth are likely to be affected by the trade-off between informal care involvement and labor market participation (Heitmueller & Inglis, 2007;Schmitz & Westphal, 2017;Van Houtven et al, 2013). To investigate how economic background affects the ATE, we conduct an additional analysis reducing our sample to individuals who participated in retrospective SHARE surveys (Wave 3 or 7).…”

Section: Sensitivity Analysis and Additional Resultsmentioning

confidence: 99%

The heterogeneous effect of retirement on informal care behavior

Bergeot

Fontaine

2020

Health Economics

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It is often argued that the increased labor market participation of seniors threatens family support provided to dependent elderly people. The purpose of this paper is to assess the causal effect of retirement on the frequency of care provided by individuals aged 55–69 years to their elderly parent. Using data from the Survey of Health, Aging and Retirement in Europe (SHARE), we estimate an endogenous switching model that allows the retirement effect to be heterogeneous with respect to observed and unobserved characteristics. To tackle the possible endogeneity of selection into retirement, we use the heterogeneity of retirement rules between and within European countries. On average, being retired does not significantly impact the probability of providing care but significantly increases the frequency of care conditional on being caregiver. The same pattern is observed regardless of the individual observed characteristics, even if the provision of informal care appears to be less sensitive to the retirement status when the child cannot rely on the other parent to provide care or when both parents are in poor health. These results suggest that pension system reforms should not affect the number of caregivers. Some adverse effects on the intensity of involvement among caregivers are nevertheless expected.

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Section: Sensitivity Analysis and Additional Resultsmentioning

confidence: 99%

The heterogeneous effect of retirement on informal care behavior

Bergeot

Fontaine

2020

Health Economics

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“…For the design of LTC policies, it is not only crucial to understand their effects on the health outcomes of the elderly but also its impact on informal caregivers, which might result in positive or negative labor supply effects. Informal caregivers who drop out of the labor force face income losses and have reduced chances of finding employment or getting promotions (Skira, 2015;Schmitz & Westphal, 2017). From a budgetary perspective, negative labor supply effects can severely reduce the comparative cost advantage of informal over formal care arrangements because they directly affect tax payments and contributions to the social security system (Geyer, Haan, & Korfhage, 2017).…”

Section: Introductionmentioning

confidence: 99%

Labor supply effects of long‐term care reform in Germany

Geyer

Korfhage

2018

Health Economics

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Summary Many informal caregivers are of working age, facing the double burden of providing care and working. Negative labor supply effects can severely reduce the comparative cost advantage of informal over formal care arrangements. When designing long‐term care (LTC) policies, it is crucial to understand the effects not only on health outcomes but also on labor supply behavior of informal caregivers. We evaluate labor supply reactions to the introduction of the German long‐term care insurance in 1995 using a difference‐in‐differences approach. The long‐term care insurance changes the caregivers' trade‐off between labor supply and care provision. The aim of the reform was to strengthen informal care arrangements. We find a strong negative labor supply effect for men but not for women. We argue that the LTC benefits increased incentives for older men to leave the labor market. The results reveal a trade‐off for policy makers that is important for future reforms—in particular for countries that mainly base their LTC system on informal care.

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“…A related branch of literature relying on instrumental variables estimates direct labor supply effects of informal care. Carmichael and Charles (1998), Carmichael and Charles (2003a), Carmichael and Charles (2003b), Heitmueller (2007) and Schmitz and Westphal (2017) are prominent examples who all confirm a negative causal impact of care activities on gainful employment.…”

Section: Related Literaturementioning

confidence: 99%

Time to Care? The Effects of Retirement on Informal Care Provision

Müller

Fischer

2019

SSRN Journal

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This paper analyzes the impact of a reduction in women's labor supply through retirement on their informal care provision. Using SOEP data from the years 2001-2016 the analysis addresses fundamental endogeneity problems by applying a fuzzy regression discontinuity design. We exploit early retirement thresholds for women in the German pension system as instruments for their retirement decision. We find significant positive effects on informal care provided by women retiring from employment at the intensive and extensive margin that are robust to various sensitivity checks. Women retiring from full-time employment, highly educated women and women providing care within the household react slightly stronger. Findings are consistent with previous evidence and underlying behavioral mechanisms. They point to a time-conflict between labor supply and informal care before retirement. Policy implications are far-reaching in light of population aging. Prevalent pension reforms that aim to increase life-cycle labor supply threaten to reduce informal care provision by women and to aggravate the existing excess demand for informal care.

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Informal care and long-term labor market outcomes

Cited by 82 publications

References 39 publications

The heterogeneous effect of retirement on informal care behavior

The heterogeneous effect of retirement on informal care behavior

Labor supply effects of long‐term care reform in Germany

Time to Care? The Effects of Retirement on Informal Care Provision

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