NY24-07: Who Pays for Elder Care? An Analysis of the Financial Burden on Caregivers and Families

Abstract/Specific Aims:

This project will use data from the Health and Retirement Study to present a complete profile of elders who need care, those who receive care, and those who pay for it with money or time. We will also examine the impact of eldercare on labor force participation, especially among women. Care needs directly affect older households' budgets and can force even those with significant savings to spend down their assets and rely on Medicaid. These care needs also affect family caregivers, often women, who reduce work hours or drop out of the labor force because of their caregiving responsibilities. In addition to losing their income and potential savings, caregivers will receive lower Social Security benefits after retirement and may not qualify for OASI and SSDI if they do not accumulate sufficient work credits. 

Past research on intergenerational transfers focuses heavily on downstream transfers from parents or grandparents to children, with far less focus placed on upstream transfers. However, evidence suggests that upstream transfers do occur and can be quite costly. In addition to providing a clearer image of disparities in care needs and caregiving, our project will contribute to the literature by analyzing the distributional effects of care-related transfers in forms of time and money from children to parents.

During the first year of this project we intend to produce a working paper detailing who needs care and who provides care for those in need of care as well as the disparities in frequency and intensity of caregiving, and the potential impact of caregiving on employment. Our analysis will include a focus on elderly in communities of color and the impact of caregiving on their caregivers’ participation in social insurance programs.