Labour supply

Background: Unpaid family caregivers might suffer losses in income as a result of care provision. Methods: Here we used data from the baseline survey of the China Health and Retirement Longitudinal Study to assess the relationship between hours of weekly caregiving provided to grandchildren/parents/parents-in-law and individual’s monthly employment income. Our study sample comprised 3718 middle-aged Chinese adults who were of working age (45–60 years).

Informal care by close family members is the main pillar of most long‐term care systems. However, due to demographic ageing, the need for long‐term care is expected to increase while the informal care potential is expected to decline. From a budgetary perspective, informal care is often viewed as a cost‐saving alternative to subsidised formal care.

The opportunity costs associated with the provision of informal care are usually estimated based on the reduced potential of the caregiver to partake in paid work (both in terms of whether they are able to undertake paid work, and if so the hours of work undertaken). In addition to the hours of informal care provided, these opportunity costs are also likely determined by the necessity to perform particular informal care tasks at specific moments of the day. The literature, to date, has largely overlooked this dimension of informal care.

In this paper, we investigate the costs borne by both male and female carers in terms of their forgone formal employment opportunities. Traditionally, informal care was supplied by women but nowadays women are not only more likely to work, but also likely to be significant contributors to family finances. For women, this implies that the size of any forgone earnings cost of informal care is increasing. At the same time, population ageing is making for increasing numbers requiring care.