I discuss instrumental variable estimates of the effect of providing unpaid adult care on the probability that caregiver will be employed, using eight waves of the European Community Household Panel. This effect is of great interest because population aging in the EU is raising concern about how households choose to provide care and how this choice affects their labor supply. I focus on men aged 40-64 and women aged 40-59 from thirteen Member States, aggregated in two groups of Northern-Central and Southern countries, respectively. Previous papers with European data found that IV estimates are more negative than estimates assuming exogeneity of care-giving. However, I show that this difference is not robust once account is taken of time-invariant unobserved heterogeneity. Indeed, instruments turn out not to be needed, and while the estimated effect of informal care giving on labor supply is negative and significant, it is small in both country groups.
Presented by:
Emanuele Ciani (Dept of Economics)
Date & time:
December 15, 2010 1:00 pm - December 15, 2010 2:00 pm
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