Long-Run Consequences of Informal Elderly Care and Implications of Public Long-Term Care Insurance

Arbeitspapier

We estimate a dynamic structural model of labor supply, retirement, and informal care supply, incorporating labor market frictions and the German tax and benefit system. We find that in the absence of Germany's public long-term insurance scheme, informal elderly care has adverse and persistent effects on labor market outcomes and, thus, negatively affects lifetime earnings and future pension benefits. These consequences of caregiving are heterogeneous and depend on age, previous earnings, and institutional regulations. Policy simulations suggest that public long-term care insurance policies are fiscally costly and induce negative labor market effects. But we also show that they can offset the personal costs of caregiving to a large extent and increase welfare for those providing care, especially for low-income individuals.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 16124

Classification and Topics

• Classification: Wirtschaft ; Health: Government Policy; Regulation; Public Health ; Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs ; Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination ; Time Allocation and Labor Supply ; Retirement; Retirement Policies
• Subject: long-term care ; informal care ; long-term care insurance ; labor supply ; retirement ; pension benefits ; dynamic structural model

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Korfhage, Thorben ; Fischer, Björn
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2023

Further information

• Handle: http://hdl.handle.net/10419/272751
• Last update: 10.03.2025, 11:44 AM CET