endogeneity

In this paper, we take a fresh look at the magnitude of the trade-off between caring informally for a parent and paid work. We adopt a simultaneous approach with a primary focus on how hours of care are influenced by hours of work rather than the other way round. We also investigate the role that filial obligations play in choices of caring versus working. Using the SHARE data (2004 and 2006) we find that the elasticity of informal care hours in response to working hours is between −0.17 in the caregivers sample and −0.19 in the women-only caregivers sample; small but not negligible.

There is limited evidence on the relationship between formal and informal care using panel data in a U.K. setting and focused specifically on people living together (co-residents). Using all 18 waves of the British Household Panel Survey (1991-2009), we analyse the effect of informal care given by co-residents on the use of formal home care and health care services more generally. To account for endogeneity, we estimate models using random effects instrumental variable regression using the number of daughters as a source of exogenous variation.