Pelin Akyol, e61 Institute - Effects of Informal Caring on Labour Market Outcomes of Carers

Title: Effects of Informal Caring on Labour Market Outcomes of Carers: Evidence from HILDA

Abstract: This study aims to investigate the causal impact of informal caregiving on the labour market outcomes of carers using an instrumental variable approach. We use data from the Household, Income and Labour Dynamics in Australia survey (HILDA) and consider the occurrence of a serious injury or illness in a family member as an instrumental variable for being a carer. In our first-stage results, we find a significant increase in the likelihood that individuals become carers when a family member experienced a serious injury or illness in the last year. In our instrumental variable analysis, we find that informal caregiving significantly decreases the number of hours worked per week by around 12 hours, and primary caregivers face a more substantial reduction of 16 hours. Our findings also suggest significant heterogeneity in these results by age. Young individuals who take on a caring role do not significantly change their labour market status but experience a sharp decline in life satisfaction. Meanwhile, older individuals reduce participation in the labour force, but life satisfaction remains roughly unchanged.

Our results highlight the complex relationship between informal caregiving responsibilities and labour market outcomes and the effect on overall well-being of individuals who are taking up a carer role.

Presenter:  Pelin Akyol, e61 Institute

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