Health of Elderly Parents, Their Children's Labor Supply, and the Role of Migrant Care Workers

60 Pages Posted: 8 Oct 2020

See all articles by Wolfgang Frimmel

Wolfgang Frimmel

University of Linz

Martin Halla

Johannes Kepler University Linz - Department of Economics; IZA Institute of Labor Economics

Jörg Paetzold

University of Salzburg

Julia Schmieder

German Institute for Economic Research (DIW Berlin); IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: October 2020

Abstract

We estimate the impact of parental health on adult children’s labor market outcomes. We focus on health shocks which increase care dependency abruptly. Our estimation strategy exploits the variation in the timing of shocks across treated families. Empirical results based on Austrian administrative data show a significant negative impact on labor market activities of children. This effect is more pronounced for daughters and for children who live close to their parents. Further analyses suggest informal caregiving as the most likely mechanism. The effect is muted after a liberalization of the formal care market, which sharply increased the supply of foreign care workers.

Keywords: Informal care, formal care, aging, health, labor supply, labor migration

JEL Classification: J14,J22,I11,I18,R23

Suggested Citation

Frimmel, Wolfgang and Halla, Martin and Paetzold, Jörg and Schmieder, Julia, Health of Elderly Parents, Their Children's Labor Supply, and the Role of Migrant Care Workers (October 2020). DIW Berlin Discussion Paper No. 1902, Available at SSRN: https://ssrn.com/abstract=3706014 or http://dx.doi.org/10.2139/ssrn.3706014

Wolfgang Frimmel

University of Linz ( email )

Altenbergerstr. 69
A-4040 Linz, Uper Austria 4040
Austria

Martin Halla

Johannes Kepler University Linz - Department of Economics ( email )

Altenbergerstrasse 69
A-4040 Linz, 4040
Austria

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Jörg Paetzold

University of Salzburg ( email )

Julia Schmieder (Contact Author)

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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