RWI Materialien

RWI Materialien 100

Diskussionspapier: Informelle Pflege und Arbeitsmarktpartizipation

by Magdalena Stroka and Roland Linder

01/2016, 18 S./p., 8 Euro, ISBN 978-3-86788-698-7

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Abstract

Due to the demographic change and the concomitant ageing of society, the labor force will reduce
substantially. In order to mitigate the consequences of the demographic change the European Council
aims at a higher labor force participation of women. Simultaneously, the demand for informal care will
increase due to the ageing of society. Owing to the traditional understanding of women's role, mainly
females engage in informal care. Attempting to counteract the reduction of labor force by means of
increasing women’s labor force participation, there occurs a conflict between rising demand for
informal care and decreasing labor force. Based on this background, the compatibility of labor market participation and informal care should be contemplated critically. The objective of this study is to analyze the effects of informal care on labor market participation of men and women. This study uses administrative data of Germany’s largest sickness fund, the Techniker Krankenkasse, to analyze the above?mentioned issue. The data set contains more than 16 million observations for 2007?2009. In order to identify the effects of informal care on labor force participation, linear regression models are estimated in which is controlled for time?invariant heterogeneity. For men the results are not significant. The results for women illustrate a significant positive relationship between informal care and long?term as well as short?term unemployment. In order to discuss the effects of informal care on labor force participation, it is essential to take all opportunity costs into account. The current care laws include a financial compensation for informal caregivers, but they do not take the reduction or termination of employment and the associated reduced income into consideration. A transition to more flexible working hours could possibly relieve informal caregivers.

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