Instrumental variables

Objective To estimate how labor force participation is affected when adult children provide informal care to their parents. Data Source Survey of Health, Ageing and Retirement in Europe from 2004 to 2013. Study Design To offset the problem of endogeneity, we exploit the availability of other potential caregivers within the family as predictors of the probability to provide care for a dependent parent. Contrary to most previous studies, the dataset covers the whole working‐age population in the majority of European countries.

It is well acknowledged that the intensity of caregiving affects the labour force participation of caregivers. The literature so far has not, however, been able to control effectively for the endogeneity of caregiving intensity. This paper contributes by dealing with the endogeneity of unpaid caregiving intensity when examining its impact on the labour force participation of caregivers. We distinguish between care provided to people who cohabit with the care recipient and care provided to recipients who reside elsewhere, as well as between primary and secondary caring roles.