Distributional effects of financial support models for family caregivers

Informal care provided by family members is the central pillar of home care in Germany. In view of the increasing need for care and the shortage of skilled workers in formal care, the informal pillar may even gain in importance in the future. It is of central importance that informal caregivers find conditions that make it easier for them to engage in informal care. It is well known that informal care is associated with various health, time, and financial burdens for family caregivers. In this project, we focus on the financial situation of family caregivers. First, the income situation in the status quo is considered. Long-term care insurance supports people in need of care, among other things, with the care allowance, the amount of which varies with the recognized degree of care. The care allowance can be passed on to the caregivers, but its use is in principle free. Secondly, we analyse the income effects of wage replacement models for informal caregivers. Currently, in the context of informal care, a type of benefit similar to the parental allowance is being discussed. In this project, two alternative models will be considered. In the first model, a wage replacement benefit based on the parental allowance is to be introduced. The second model provides for a basic salary for family caregivers, which is calculated independently of previous earnings. A similar model exists in Burgendland in Austria. The analysis will use a detailed microsimulation model based on data from SOEP.