This article formulates and estimates a dynamic discrete choice model of elder parent care and work to analyze how caregiving affects a woman's current and future labor force participation and wages. The model incorporates parental health changes, human capital accumulation, and job offer availability. The estimates indicate that women face low probabilities of returning to work or increasing work hours after a caregiving spell. I use the estimated model to simulate the caregiving, employment, and welfare effects of a longer unpaid work leave than currently available under the Family and Medical Leave Act, a paid leave, and a caregiver allowance.
We examine whether long-term care (LTC) experience helps explain the low demand for long-term care insurance (LTCI). We test if expectations about future informal care receipt, expectations about inheritance receipt, and LTCI purchase decisions vary between individuals whose parents or in-laws have used LTC versus those who have not. We find parental use of a nursing home decreases expectations that one’s children will provide informal care, consistent with the demonstration effect. Nursing home use by in-laws does not have the same impact, suggesting that individuals are responding to information gained about their own aging trajectory. Nursing home use by either a parent or in-law increases LTCI purchase probability by 0.8 percentage points, with no significant difference in response between parents’ and in-laws’ use. The estimated increase in purchase probability from experience with LTC is about half the previously estimated increase from tax policy-induced price decreases.
Approximately 34 million family and friends provided unpaid care to individuals aged 50 and older in 2015. It is difficult to place a value on that time, because no payment is made to the caregiver, and multiplying caregiving hours by a wage does not account for the value of lost leisure time, implications for future employability and wages, or any intrinsic benefits accrued to the care provider. This study used a dynamic discrete choice model to estimate the costs of informal care provided by a daughter to her mother, including these other costs and benefits not typically accounted for, and compared these cost estimates for 4 categories of the mother's functional status: doctor-diagnosed memory-related disease, limitations in activities of daily living (ADLs), combination of both, cannot be left alone for 1 hour or more. We studied women aged 40 to 70 with a living mother at the start of the sample period (N=3,427 adult daughters) using data from the Health and Retirement Study (1998-2012). The primary outcome was the monetized change in well-being due to caregiving, what economists call "welfare costs." We estimate that the median cost to the daughter's well-being of providing care to an elderly mother ranged from $144,302 to $201,896 over 2 years, depending on the mother's functional status. These estimates suggest that informal care cost $277 billion in 2011, 20% more than estimates that account only for current foregone wages.
We examine the impact of the introduction of paid maternity leave in Norway in 1977 on maternal health. Before the policy reform, mothers were eligible for 12 weeks of unpaid leave. Mothers giving birth after July 1, 1977 were entitled to 4 months of paid leave and 12 months of unpaid leave. We combine Norwegian administrative data with survey data on the health of women around age 40 and estimate the mediumand long-term impacts of the reform using regression discontinuity and difference-inregression discontinuity designs. Our results suggest paid maternity leave benefits are protective of maternal health. The reform improved a range of maternal health outcomes, including BMI, blood pressure, pain, and mental health, and it increased health-promoting behaviors, such as exercise and not smoking. The effects were larger for first-time and low-resource mothers and women who would have taken little unpaid leave in the absence of the reform. We also study the maternal health effects of subsequent expansions in paid maternity leave and find evidence of diminishing returns to leave length.
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