The Impact of Informal Caregiving on Labour Supply Before and After a Parent’s Death

Abstract

Most European countries are facing an ageing population, which points to a need for having as many people as possible of employable age working full time. The growing number of older people increases the pressure on health and care services as well as on family caregivers. Adult children are important care-providers in their parents’ final years. This study investigates how having a parent in need of care affects sons’ and daughters’ labour market participation. The question is investigated by analysing longitudinal data from the Norwegian life course, ageing and generation study. The empirical strategy is first to use register information about parents’ demise as an indicator for amplified care needs in the period prior to their death and explore patterns in labour market participation (employment and earnings) before and after the death of a parent. Then, register data are combined with survey data in order to separate caregivers from non-caregivers prior to the loss of a parent. The analyses show a negative employment trend in the years before and after the loss of a lone parent. They also show a different development in earnings between caregivers and non-caregivers. Caregivers have a weaker development in earnings both before and after the death of their parent compared to non-caregivers. The study concludes that caring for older parents has a negative impact on the children’s labour market participation in both the period with substantial caregiving needs and the period following the parents’ demise.