WI21-08: Employment Shocks, Unemployment Insurance, and Caregiving

Working Americans are increasingly taking on various caregiving roles for family members. In light of the COVID-19 pandemic, the impact of job loss and income supports on the labor supply, economic well-being, and caregiving behavior of families with care needs is a pressing policy question. This paper considers caregiving during periods of (involuntary) unemployment and, specifically, the role of unemployment insurance (UI) on caregiving. Although caregiving increases following job separations, more generous UI benefits reduces the likelihood that workers who are laid off provide family care. The effect is the largest for adults between aged 40 and 65, for men, and for unmarried individuals. In the context of a rapidly aging US population, this analysis provides knowledge about how social insurance policies that provide wage replacement support working families with growing long term care needs.