The Productivity Commission’s recently released report on a path to universal early childhood education and care (ECEC) has put caregiving back in the spotlight. Given that the report is nearly 1000 pages, you might have overlooked the section highlighting how grandparents, especially grandmothers, provide most of the informal child care. The report goes on to explain that the availability of ECEC can therefore impact a grandmother’s labour supply.
But what about other caregiving?
Older women take on caregiving responsibilities beyond, and in addition to, looking after their grandchildren. They are often the main caregiver for those with a disability or a health condition, including looking after their partner as they enter older age. In fact, looking across all age groups, older women provide the highest share of this type of informal care.
Older women are almost twice as likely to take on informal caregiving roles compared to men. Around 12 percent of older women are carers, with 8 percent being the main carers – compared to 7 percent and 4 percent, respectively, for men.
Why do older women tend to take on so much informal care? Well, the decision to take on a caring role is hard and is affected by a range of factors.
First, preferences, norms and stereotypes will influence family decision making. In our society, caregiving tends to be seen as ‘women’s work’ – both at home, and in the formal workplace. For some people, they will also prefer to be cared for within their home, and even by someone they already know.
Second, a person’s labour market prospects can be seen as the opportunity cost of informal care. People with weaker attachment to the labour market tend to have a lower opportunity cost. And, that’s generally the case for older women.
Third, the availability, accessibility and quality of formal care will matter. For instance, if the out-of-pocket costs associated with formal care are high, that may see households not use formal care options.
Taken together, this often leads to older women providing a large share of informal care. But should we care?
Providing care for others can be a rich and rewarding experience for those that can do so. However, being a main carer is also a time intensive activity – one that can take away from being able to do other things, including enjoying leisure or even participating in paid work.
As the Productivity Commission report explains, older women are a growing share of our labour force. Naturally, we are left with the question: will informal caregiving act as a break on this rise in older women participating in the labour market?
To understand whether time spent caring actually impacts older women’s labour force participation, I compare the employment outcomes of people before and after they become a main carer for someone with a disability or health condition. Overall, being a main carer has a negative impact on labour supply. However, surprisingly, there is a stark gender difference in this impact.
Women, particularly older women, face persistent employment loss after becoming a main carer, while men’s employment rebounds.
Put another way, for the few men who take on a caring role, they experience a sudden but temporary loss in employment and return to work around a year later. For the larger share of women who take on a similar main caring role, their sudden drop in employment is permanent.
This suggests that the provision of informal care limits the employment potential of older women, and this has a larger and more lasting impact on women compared to men.
So, what does this all mean for the growth in older women’s role in the labour market moving forward? As our population ages, more caregiving needs will arise. Alongside the factors discussed above, this may mean that we are increasingly relying upon older women to provide care for others, including for grandchildren and their partners.
If a greater share of older women is taking on more informal care and permanently leaving work, could their economic security be at risk? Keep an eye out for future work as we begin to unpack this, and other impacts of older women’s time spent caring.
