Career penalties of long term-care provision

It is the aim of the project to analyze the labor market consequences of informal care provision. For the identification we follow the literature on childcare penalties (see Kleven et al. 2019) to quantify the short- and long-run career costs of childcare. Rellstab et al. (2020) for the Netherlands and Halla et al. (2021) for Austria have applied this framework to estimate the career effects for adult children when their parents have a health shock. For the analysis they use administrative data which allow to link health shocks for parents with labor market outcomes for children. In this project we extend these analyses as we can link information about informal care provision from the Public Health Monitor (waves 2012, 2016 2020) to the administrative data in the Netherlands. Thus, we can directly focus on the effect of informal care provision on labor market effects. We will use two complementary identification strategies. First, as the previous papers we exploit health shocks of parents in an event study and separately estimate effects for those who provide informal care. We assess the effect of the potential bias of selecting into informal care provision using information from the pre-event period to predict the probability to provide care. Second, we focus only on the group of care providers and use the death of the parents as an event. The rich administrative data allow us to distinguish between the severity of health shocks and to focus on various labor market outcomes, including hourly wages, worked hours or industry, as well as other sources of income, such as unemployment, disability or welfare benefits. Moreover, we can study the long-run implications not only for the working life but as well for the retirement phase and pension income. In contrast to Germany, in the Netherlands informal care providers do not receive additional pension claims. Therefore, this cross-country comparison will be important to learn about the role for additional pension claims to compensate informal care providers during retirement.