WI20-12: Caregiving and Labor Force Participation

The US population is aging rapidly, with the number of Americans age 65 and older expected to double by 2050. As the elderly are living longer and with more chronic conditions, the demand for long-term, non-acute care is expected to grow apace. A large share of the growing demand for elder care is met informally by relatives. Many family caregivers also work, and there is a growing body of evidence that the burden of caregiving interferes with employment. By pulling older caregiving Americans out of the labor force, family caregiving obligations may be directly undermining federal efforts to extend working lives and has implications for both retirement security and the productivity of an aging workforce. Although it is understood that caregiving ultimately results in lower labor force attachment, it is unknown how rapidly the employment impacts arise once individuals begin providing elder care, and as a result, what types of social insurance programs and employment policies, including social security caregiver credits, might help caregivers sustain employment and ensure income security in retirement. The proposed study will create a novel dataset to capture detailed employment outcomes in the months before and after caregiving starts and link these short run changes to medium run earnings and employment outcomes. This study will highlight a period where older Americans are at a greater risk for leaving the labor force early, tie this risk directly to the retirement security of caregivers, and provide evidence for how policy can address this risk.