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Estimating the Cost of Informal Care with a Novel Two-Stage Approach to Individual Synthetic Control

Author

Listed:
  • Maria Petrillo

    (ESRC Centre for Care, CIRCLE, University of Sheffield, Sheffield S1 4DT, UK)

  • Daniel Valdenegro

    (ESRC Centre for Care, Leverhulme Centre for Demographic Science, University of Oxford, Oxford, UK)

  • Charles Rahal

    (ESRC Centre for Care, University of Oxford, Oxford, UK)

  • Yanan Zhang

    (ESRC Centre for Care, University of Oxford, Oxford, UK)

  • Gwilym Pryce

    (ESRC Centre for Care, School of Economics, University of Sheffield, Sheffield S1 4DT, UK)

  • Matthew R. Bennett

    (ESRC Centre for Care, School of Social Policy, University of Birmingham, Birmingham, UK)

Abstract

Informal carers provide the majority of care for people living with challenges related to older age, long-term illness or disability, often at significant personal cost. Leveraging data from the UK Household Longitudinal Study, this paper provides the first robust causal estimates of the caring income penalty using a novel individual synthetic control based method that accounts for unit-level heterogeneity in post-treatment trajectories over time. Our baseline estimates identify an average relative income gap of up to 45%, with monthly losses averaging £162, peaking at £192 after four years for high-intensity unpaid carers. We find that the income penalty is more pronounced for women than for men, and varies by ethnicity and age.

Suggested Citation

  • Maria Petrillo & Daniel Valdenegro & Charles Rahal & Yanan Zhang & Gwilym Pryce & Matthew R. Bennett, 2025. "Estimating the Cost of Informal Care with a Novel Two-Stage Approach to Individual Synthetic Control," Working Papers 2025004, The University of Sheffield, Department of Economics.
    • Handle: RePEc:shf:wpaper:2025004
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    File URL: https://www.sheffield.ac.uk/economics/research/serps
    File Function: First version, March 2025
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    More about this item

    Keywords

    Causal Methods; Informal Care; Social Care; Longitudinal Analysis;
    All these keywords.

    JEL classification:

    • B23 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Econometrics; Quantitative and Mathematical Studies
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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