Grandchildren and Their Grandparents’ Labor Supply

Quaderni - Working Paper DSE N° 937

40 Pages Posted: 16 Apr 2014

See all articles by Peter Rupert

Peter Rupert

University of California, Santa Barbara (UCSB) - Department of Economics

Giulio Zanella

University of Adelaide; University of Bologna

Date Written: February 28, 2014

Abstract

We study how becoming a grandparent affects grandparents’ labor supply. In a simple model of the allocation of time in which seniors care about their offspring’s welfare and also value time spent with family children, the sign of the effect is ambiguous. Using data from the Panel Study of Income Dynamics we find evidence that becoming a grandparent causes a reduction of employed grandmother’s hours of work. We identify a lower bound of about 190. This effect originates towards the bottom of the hours distribution (i.e., among women less attached to the labor market). For employed grandfathers, the effect is also negative, originates towards the top of the hours distribution (i.e., where overtime work is substantial), but is smaller and more imprecisely estimated than for women. We also find that for working grandmothers the effect is stronger the closer grandparents and grandchildren live and during the first years since becoming a grandparent (i.e., when the grandchildren are younger). The “extensive margin” of grandparenting (becoming a grandparent) turns out to be much more important in generating these effects than the corresponding “intensive” margin (having additional grandchildren).

Keywords: Senior’s labor supply, Grandparents, Child care

JEL Classification: D19, J13, J14, J22

Suggested Citation

Rupert, Peter and Zanella, Giulio, Grandchildren and Their Grandparents’ Labor Supply (February 28, 2014). Quaderni - Working Paper DSE N° 937, Available at SSRN: https://ssrn.com/abstract=2424781 or http://dx.doi.org/10.2139/ssrn.2424781

Peter Rupert (Contact Author)

University of California, Santa Barbara (UCSB) - Department of Economics ( email )

2127 North Hall
Santa Barbara, CA 93106
United States

Giulio Zanella

University of Adelaide ( email )

Adelaide SA, 5005
Australia

University of Bologna ( email )

Piazza Scaravilli 2
Bologna, 40100
Italy

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