Does Formal Employment Reduce Informal Caregiving?

Using the Survey of Income and Program Participation, we examine the impact of formal employment on informal caregiving. We instrument for individual work hours with state unemployment rates. We find that, among women of prime caregiving ages (40–64 years), working 10% more hours per week reduces the probability of providing informal care by about 2 percentage points. The effects are stronger for more time‐intensive caregiving and if care recipients are household members. Our results imply that work‐promoting policies have the unintended consequence of reducing informal caregiving in an aging society. Copyright © 2015 John Wiley & Sons, Ltd.