University of California, Los Angeles and NBER Caregiving and Work: The Relationship between Labor Market Attachment and Parental Caregiving Sean Fahle SUNY Buffalo and Kathleen McGarry University of California, Los Angeles and NBER We are grateful to the Sloan Foundation and to the SSA through a grant to the University of Michigan for funding

Importance of Informal Care

SOURCE: Arno, Levine and Memmott, Health Affairs, 2002.

SOURCE: Arno, Levine and Memmott, Health Affairs, 2002.

Cost of Caregiving Depends on who caregivers are Drawn from those with full-time career jobs / higher opportunity cost of time? Drawn from those with weaker attachment to the labor force? Depends on long-term effects Can caregivers return to employment? Do they suffer permanent decline in earnings? Are there long-term financial consequences?

Caregivers are Primarily Female 70% of child caregivers are daughters 85% of child-in-law caregivers are daughters-in-law

Outcomes for Caregivers Concerns about labor supply Change in labor force participation Decline in earnings growth Effect on retiree benefits: Pensions, health insurance Concerns about own health Increase in stress and depression Increase in incidence of high blood pressure Worse self-reported health Little change in doctor diagnosed conditions

Data Sample restrictions: 1,557 women or 15,570 person years of data Original HRS cohort Observed from 1992 to 2010 Women only Living parents or parents-in-law in wave 1 Not providing care when first observed 1,557 women or 15,570 person years of data

Question Did you (or your husband / wife / partner) spend a total of 100 or more hours (since the previous wave / in the last two years) helping your (parents / mother / father) with basic personal activities like dressing, eating, and bathing?” Follow up questions allow us to identify who helped, who was helped, and the number of hours.

Labor Force Attachment Three approaches Control for past behavior Tenure on longest job and experience, measured at first interview Use Social Security earnings records Quarters of coverage ages 25-44 Average quarterly earnings ages 25-44 Expected PIA Fixed effect models

Probability of Providing Care by Wave

Probability of Ever Providing Care by Wave

Hours of Care: Unconditional and Conditional 10 hours a week for two year

Cumulative Hours: Unconditional and Conditional

Selected Summary Statistics Ever Care No Care Age 51.9 52.4 Non-white 0.18 0.14 Schooling 12.8 12.5 Working full time 0.51 0.47 Earnings if >0 33,370 30,025 Experience 23.5 21.6 Tenure on longest job 11.9 Covered quarters 25-44 38 34 Avg quarterly earnings 5,110 4,800 Expected PIA 1,620 1,510

Selected Summary Statistics Ever Care (723) No Care (834) Risk: Number of living parents 1.32 1.23 Number of living in-laws 0.69 0.52 Number of siblings 2.80 3.08 Number of sisters 1.39 1.65

Regression Analysis of Caregiving Examine Prob(care) as a function of: Standard demographic and economic variables + initial experience, tenure on the longest job Significant coefficients include: Experience in 1992 (+) Number of Sisters (-) Parental age (+)

Regression Analysis of Caregiving Examine Prob(care) as a function of: Standard demographic and economic variables + initial experience, tenure on the longest job Significant coefficients include: Experience in 1992 (+) 10 yrs of experience = 2 ppt increase / 20% Number of Sisters (-) Each sister = 10 ppt decline Parental age (+)

Regression Analysis of Caregiving Examine Prob(care) as a function of: Standard demographic and economic variables + initial experience, tenure on the longest job + covered quarters, avg quarterly earnings Significant coefficients include: Tenure on the longest job (+) Number of sisters (-), sisters-in-law (-) Parent age (+) Note: Social Security variables not significant

Regression Analysis of Caregiving No evidence of negative selection into caregiving with respect to labor market experience Positive related to tenure / experience Caregiving depends in large part on need Older parents Fewer substitute caregivers

Regression Analysis Caregiving Separately for parents and parents-in-law For Parental Caregiving Experience (+) Sisters (-) Parental age (+) For Parent-in-law Caregiving Parent-in-law age (+) Weak evidence that husband’s earnings and household’s financial status matter

Observed Changes in Work & Caregiving Time T-1 / Time T   Working full-time Working part-time Not working Percent 72% 11% 17% Change hours -1.87 -15.18 -41.09 Change earnings 3,522 1,438 -34,122 15% 53% 32% 9.17 -1.61 -20.87 2,072 1,106 -14,735 3% 8% 89% 46.88 16.84 4,919 6,853

Observed Changes in Work & Caregiving Time T-1 / Time T   Working full-time Working part-time Not working Caregivers Percent 72% 11% 17% Change hours -1.87 -15.18 -41.09 Change earnings 3,522 1,438 -34,122 Non-caregivers 74% 12% 14% -0.03 -15.42 -42.15 1,136 -5,807 -33,754

Observed Changes in Work & Caregiving Time T-1 / Time T   Working full-time Working part-time Not working Caregivers Percent 15% 53% 32% Change hours 9.17 -1.61 -20.87 Change earnings 2,072 1,106 -14,735 Non-caregivers 15 61 24% Change in hours 14.27 -0.64 -18.95 1,547 -1221 -11, 56 , 9

Regression Analysis of Working Prob (working) = function of caregiving + Standard demographic and economic variables and initial experience, tenure on the longest job + Social Security variables Prob (working) in fixed effects Can’t identify effect of non-varying factors (e.g. sisters, prior experience, schooling…)

Regression Analysis Working Results of standard variables are as expected: Age (-) Schooling (+) Experience / tenure (+) Married (-) Poor health (-) Social Security measures not significant

Regression Analysis of Working Results of standard variables are as expected: Age (-) Schooling (+) Experience / tenure (+) Married (-) Poor health (-) Social Security measures not significant Caregiving measures Negative and significant effects on employment Negative (not significant) effects on earnings Mixed effects on conditional earnings

Regression Analysis of Working: Hours Dependent Variable OLS Inc. Soc Sec Fixed Effects Working Caregiving -0.046** -0.061*** -0.29* Hours worked 1.669** -1.90** -1.71*** Hours worked > 0 -0.164 0.31 -1.290**

Regression Analysis of Work: Earnings Dependent Variable OLS Inc. Soc Sec Fixed Effects Annual Earnings Caregiving -0.90 -1.23 -1.26 Annual Earnings > 0 1.07 1.28 -0.27 Tenure / Experience positive and significant predictors

Long term outcomes Depends on long-term effects Can caregivers return to employment? Do they suffer permanent decline in earnings? Are there long-term financial consequences?

Long term effects of Caregiving Means Non-Caregivers Caregivers 1992 Change 2010 – 1992 2010-1992 Net Wealth 344,399 163,450 360,242 133,276 HH Income 78,304 -21,721 83,847 -24,826 Earnings > 0 30,720 -18,499 34,030 -26,080* Work 0/1 0.67 -0.44 0.71 -0.47 Work Full-time 0.47 -0.37 0.51 -0.44** Work Part-time 0.2 -0.07 -0.03 Hrs worked > 0 35.83 -10.67 37.27 -11.79

Regression Analysis of Working 2010 Prob (working) = function of caregiving + Standard demographic and economic variables and initial experience, tenure on the longest job + Social Security variables

Regression Analysis of Working 2010 Dependent Variable OLS Inc. Soc Sec Any Work 2010 Ever provided care -0.025 -0.24 Annual Earnings 2010 ($1000) -4.57** -4.61** Annual Earnings 2010 if > 0 ($1000) -12.47** -11.50**

Conclusions Caregivers are not drawn from those with weak attachment to the labor force Greater experience, tenure, earnings More schooling Caregiving has a negative effect on work Negative on employment and hours Caregiving has long-term consequences Less likely to be working years later Lower earnings

What the Future Holds Declines in fertility More women working “Protective Effect” of Sisters More women working Greater opportunity cost Aggregate cost of lost wages could increase Changes in disease specific mortality Greater demand for care

Thank You

https://projects.fivethirtyeight.com/mortality-rates-united-states/

Probability of Caregiving Examine P(care) as a function of: Demographic and economic variables Age, race, schooling, marital status, hhwealth, number of siblings, parents, spousal income, spousal employment + Initial experience, tenure on the longest job

Long term effects Non-Caregivers Caregivers 1992 2010 Change Net Wealth 344,399 507,849 163,450 360,242 493,518 133,276 HH Income 78,304 56,583 -21,721 83,847 59,021 -24,826 Earnings > 0 30,720 34,521 -18,499 34,030 22,914 -26,080* Work 0/1 0.67 0.23 -0.44 0.71 0.24 -0.47 Work Full-time 0.47 0.1 -0.37 0.51 0.08 -0.44** Work Part-time 0.2 0.13 -0.07 0.17 -0.03 Hrs worked > 0 35.83 27.28 -10.67 37.27 27.5 -11.79

Selected Summary Statistics All Ever Care No Care Age 52.3 51.9 52.4 Non-white 0.16 0.18 0.14 Schooling 12.6 12.8 12.5 Working full time 0.49 0.51 0.47 Earnings if >0 31,631 33,370 30,025 Experience 22.5 23.5 21.6 Tenure on longest job 12.3 11.9 Covered quarters 25-44 36 38 34 Avg quarterly earnings 4,940 5,110 4,800 Expected PIA 1,560 1,620 1,510

Selected Summary Statistics All (1,557) Ever Care (723) No Care (834) Risk: Number of living parents 1.27 1.32 1.23 Number of living in-laws 0.60 0.69 0.52 Number of siblings 2.95 2.80 3.08 Number of sisters 1.53 1.39 1.65

Changes in Work and Caregiving Time T-1 / Time T   Working full-time Working part-time Not working Percent 72% 11% 17% Change hours -1.87 -15.18 -41.09 Change earnings 3,522 1,438 -34,122 15% 53% 32% 9.17 -1.61 -20.87 2,072 1,106 -14,735 3% 8% 89% 46.88 16.84 4,919 6,853

Changes in Work Caregiving Time T-1 / Time T Working full-time Working part-time Not working Percent 74% 12% 14% Change hours -0.03 -15.42 -42.15 Change earnings 1,136 -5,807 -33,754 15 61 24% Change in hours 14.27 -0.64 -18.95 1,547 -1221 -11,956 3% 6% 91% 42.46 17.60 0.00 16,718 5,792