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Caregiving, Work, and Social Programs

Paper Session

Monday, Jan. 4, 2021 3:45 PM - 5:45 PM (EST)

Hosted By: Labor and Employment Relations Association
  • Chair: V. Joseph Hotz, Duke University

The Impact of Childhood Health Shocks on Parental Labor Supply

Tine L. Mundbjerg Eriksen
,
Aarhus University
Amanda Gaulke
,
Kansas State University
Niels Skipper
,
Aarhus University
Jannet Svensson
,
Copenhagen University Hospital

Abstract

Causal estimates of the effects of child health shocks on parental labor market outcomes are important for making efficient child disability insurance policy. We leverage the onset of type 1 diabetes (T1D) in childhood to investigate the link between child’s health and parental labor supply. We argue that T1D hits children as-if randomly because the exact cause is unknown, and it has low inheritability. T1D is characterized by a sudden, unpredictable onset, and receiving treatment is crucial to even short-term survival. Using Danish administrative registry data with quasi-experimental methods we show that mothers adjust their labor supply on the intensive margin and experience a 4-5% decrease in wage income that extends at least ten years after diagnosis. This reduction in wage income is similar in magnitude and duration to the motherhood penalty in Denmark. Maternal wage income and labor supply effects are smaller than previous estimates using disabilities that qualify for welfare, emphasizing the importance of not confounding welfare with child health. Fathers do not experience any long-term reduction in wage income.

Understanding the Impact of Supplemental Security Income on Reducing Disparities in Caregiving Burden for Families of Children with Special Health Care Needs

Stephanie Rennane
,
RAND Corporation
Lynn Karoly
,
RAND Corporation

Abstract

Prior research finds a higher prevalence of special health needs among racial and ethnic minority children and children in families of low socioeconomic status (SES). Low-SES and minority children have also been found more likely to receive inappropriate diagnoses, experience worse health outcomes, and receive inadequate or unsatisfactory treatment when compared to non-minority and higher SES children. While many health and income policies target at-risk populations, little is known about the effectiveness of cash programs in minimizing racial, ethnic or SES-related disparities in the familial burden associated with caring for children with special needs. This study examines the role of Supplemental Security Income in minimizing racial, ethnic or SES-related disparities in the familial burden associated with caring for children with special health care needs. We use the National Survey of Children with Special Health Care Needs to identify existing differences in caregiving burden and use of SSI across racial and ethnic minority families and low-SES families who are caring for children with special health care needs and decompose child and family characteristics that drive the identified differences in caregiving burden and SSI receipt using a Oaxaca-Blinder Decomposition method. This research will provide decision makers with information to assess how well a cash transfer improves the health and well-being of low-SES and minority CSHN and their families, and will lay a theoretical and methodological foundation for future research analyzing the mechanisms through which policy can improve family and child health outcomes for this vulnerable population

The Role of Paid Family Leave in Spousal Labor Supply Responses to a Disability or Health Shock

Priyanka Anand
,
George Mason University
Laura Dague
,
Texas A&M University
Kathryn Wagner
,
Marquette University

Abstract

The onset of a disability or major health shock has the potential to affect the labor supply decisions not only of those who experience the event but also of their family members. People who experience a disability or health shock often experience difficulty working, incur large medical expenses, and also may also require additional help with daily activities. Thus, spouses face a tradeoff between time spent earning income for the family and providing care for their partner. However, these conflicting incentives may be mitigated by the existence of paid leave. Our paper explores the role of paid leave laws implemented in California and New Jersey in the spousal labor supply response to a work-limiting disability or health shock. The data come from the Survey of Income and Program Participation (SIPP) 1996, 2001, 2004, and 2008 panels. We find that paid leave causes women whose spouse experiences the onset of a disability or health shock to strengthen their labor force attachment. Specifically, women with paid leave are more likely to report having a job for all weeks following the event, have higher earnings, are less likely to report not having a job due to caregiving, and more likely to report reducing their hours to provide caregiving. Overall, these results suggest that paid leave allows women to remain in the labor force after a spouse experiences a disability or health shock while increasing their provision of informal caregiving for a spouse who experiences a health shock.

Unemployment Insurance and Family Caregiving

Yulya Truskinovsky
,
Wayne State University

Abstract

A large share of the growing demand for elder care in the US is met informally by relatives, many of whom also work, and there is a growing body of evidence that the burden of caregiving interferes with employment. People also increase time spent caring for family members when they leave work, either voluntarily or involuntarily. This paper considers the impact of Unemployment Insurance (UI) on time spent caring for spouses and elderly parents. By changing the opportunity cost of time during unemployment spells, UI changes the tradeoffs faced by beneficiaries. How this extends to time spent caring for family members, such as elderly parents, is an important empirical question. I leverage plausibly exogenous state-level changes in eligibility, maximum weekly benefit amount and duration of benefits between 1991 and 2011 to identify the causal effects of UI receipt on the likelihood that laid off workers provide informal care. Using the Survey of Income and Program Participation (SIPP), I find that more generous UI benefits increase the likelihood that respondents will provide care to adult family members during a layoff. A one standard deviation increase in UI maximum benefit increases the likelihood that a UI-eligible worker age 40-65 will provide informal care by 0.70 percentage points, or 16%. In the context of a rapidly aging US population, this work contributes to the growing evidence on how social insurance policies that provide wage replacement can support the growing need for long-term care.
Discussant(s)
Manasi Deshpande
,
University of Chicago
Till Von Wachter
,
University of California-Los Angeles
JEL Classifications
  • J2 - Demand and Supply of Labor