Empirical Economics

, Volume 44, Issue 2, pp 959–979 | Cite as

Informal home care and labor-force participation of household members

Article

Abstract

In Germany, informal home care is preferred to professional care services in the public discussion as well as in legal care regulations. However, only minor importance is ascribed to the opportunity costs caregivers face. Therefore, this article explores the influence home care has on the labor supply of caregivers who cohabitate with the care recipient. I use data from the German Socio-Economic Panel from 2001 to 2007, which allows researchers to merge the characteristics of both groups for the first time. Owing to diverging gender roles, I examine female and male caregivers separately. The results show that having an individual in need of care in the household does not decrease labor supply to an economically relevant quantity. As providing care might be endogenous to the labor-supply decision, I test for endogeneity by using characteristics of care recipients as instruments and I additionally test for sample attrition. Moreover, the panel structure allows me to control for unobserved heterogeneity.

Keywords

Informal care Labor supply Endogeneity 

JEL Classification

J14 J22 D64 

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Copyright information

© Springer-Verlag 2012

Authors and Affiliations

  1. 1.Ruhr Graduate School in Economicsc/o University of Duisburg-Essen, Chair of Public Finance, Prof. Dr. Reinhold SchnabelEssenGermany

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