Caregiving doesn’t crowd out working
The labour market impacts of caregiving are much smaller than previously thought, according to new research from The Australian National University (ANU).
The study, conducted by ANU economics Professor Andrew Leigh, focused on individuals who voluntarily provide care for an elderly or disabled person. It determined the impact of caregiving on paid employment, wages, and life satisfaction.
What distinguishes this study from prior research on caregiving is that it follows the same individuals over a seven-year period, and looks to see what happened to their labour market outcomes when they changed from being a carer to a non-carer (or vice-versa).
“Much of the previous research has simply compared carers and non-carers,” said Professor Leigh.
“When you do that, you find very large gaps between the labour market outcomes of the two groups.
“But when you look at the same individuals over time, the causal impact of caregiving on wages and life satisfaction seems to be close to zero.”
He added that while the causal impact of caregiving on employment is negative, it is much smaller than previous studies have suggested.
“For example, while caregivers have a labour participation rate that is 20-28 percentage points lower than non-carers, this impact drops to 4-6 percentage points when looking at within-person changes,” said Professor Leigh.
“These results do not detract from the vast contribution that unpaid carers make to the wellbeing of elderly and disabled people. Australians should recognise that millions of hours of care are provided annually by friends and family.
“But it would be a mistake to assume that these hours are all coming at the expense of paid employment.
“Policymakers should also be modest about the ability of government policies to increase the labour market attachment of caregivers.”
The research – Informal Care and Labor Market Participation – is forthcoming in the journal Labour Economics.
