Informal Caregiving and the Retirement Decision

Abstract

The probability of providing informal care grows with one's own age. While labor market effects due to caregiving are moderate, they could be concentrated in the years close to retirement. Therefore, I investigate whether care in the previous year leads to retirement in the year after by using German Socio-Economic Panel data from 2001 to 2009 and discrete-time hazard models. The effect of care on the retirement decision is indeed much higher than its effect on the labor or working hours of middle-aged individuals. Women are affected to a larger extent but the retirement decision of men also reacts to their caregiving obligations.