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Long-term Care Responsibility and its Opportunity Costs

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  • Meng, Annika

Abstract

This paper analyzes the relationship between long-term care provision and the average individual wage rate. In addition, the effects of the number of hours spent on caregiving on the probability of employment as well as on the number of hours worked are examined. Data from the Survey of Health, Ageing and Retirement (SHARE) of 2004 and 2006 is used to analyze caregiving effects on the European labor market. Descriptive statistics show a positive correlation between hours of care and the wage rate for those working. In the regression analysis, sample-selection models combined with instrumental-variable estimation are used to estimate the causal effects of hours of care on wages. The results illustrate that care for parents has a large negative impact on the individual's wage rate. Test results show that controlling for sample selection is reasonable. Finally, the probability of employment is only decreased in the female sample. Although the hours worked are not significantly affected.

Suggested Citation

  • Meng, Annika, 2010. "Long-term Care Responsibility and its Opportunity Costs," Ruhr Economic Papers 168, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:168
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    References listed on IDEAS

    as
    1. Steven Stern, 1995. "Estimating Family Long-Term Care Decisions in the Presence of Endogenous Child Characteristics," Journal of Human Resources, University of Wisconsin Press, vol. 30(3), pages 551-580.
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    6. Heitmueller, Axel, 2007. "The chicken or the egg?: Endogeneity in labour market participation of informal carers in England," Journal of Health Economics, Elsevier, vol. 26(3), pages 536-559, May.
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    8. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
    9. Annika Meng, 2013. "Informal home care and labor-force participation of household members," Empirical Economics, Springer, vol. 44(2), pages 959-979, April.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Informal care; labor-market outcomes; sample selection;
    All these keywords.

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics

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