WI21-08: Employment Shocks, Unemployment Insurance and Caregiving

Americans are increasing taking on the role of informal (unpaid) caregivers for family members, including elderly or disabled parents and spouses. These family caregiving obligations can draw working age adults, especially those nearing retirement, temporarily or permanently out of the labor force, putting their long-term economic security at risk. While a negative relationship between work and caregiving has been established, how caregiving obligations interact with employment shocks is not well understood. The likelihood of exiting the labor force for caregiving may be especially acute following an employment shock, such as a layoff. The proposed study will begin to address this gap by studying the likelihood of caregiving following a job loss and the employment trajectories of displaced workers who provide informal care. It will additionally study the role of unemployment insurance benefits on both likelihood of providing informal care and returning to work by displaced workers and by their spouses. The interaction between labor market fluctuations and the growing need for long-term care may play a role in the increasing trend of non-participation as a channel of labor force exit, especially following the Great Recession. Establishing short term employment trajectories of displaced workers who start providing informal care after losing a job will highlight how family caregiving obligations may have the potential to turn short-term employment shocks into longer-run decreases in labor force participation, impacting the economic security of future SSA beneficiaries.