Financial Costs of Caregiving Over the Lifecourse

Shirely Porterfield, University of Missouri-St. Louis
H Shen

Abstract

Many research studies have documented the balancing of work and family life among adults who have caregiving responsibilities. This balance is more tenuous when the care recipient has significant disabilities or special needs. While many parents reduce work hours while their children are young, the work force ties of those whose children have disabilities that affect functioning into adulthood remain weak for a longer period of time, moderated by lower health status among these caregivers.In the US, 70% of working-age adults with disabilities live with relatives; 55% with a parent who is age 60 or older. This paper examines the health and pension costs of caregiving, specifically whether women who are or have been caregivers are more or less likely to hold a pension in their own name, whether there is a significant difference in the value of private pension holdings, given age and health status, and whether these differences persist when total household pension values are compared among women who are, or are not caregivers. Data for women aged 40–69, who have not yet retired, are drawn from the combined 2001, 2004 and 2008 panels of the US Survey of Income and Program Participation (n=40,552). Women caring for disabled or elderly relatives are significantly more likely to report fair/poor health status (28%) and more sick days (13 on average), and are less likely to have pension savings (23.6% & 32.2% respectively) than those caring for children or no one (15% report fair/poor health; 49.5% have pension savings). In addition, the odds of owning and value of pensions held by those caring for non-elderly, disabled family members are significantly lower than those of other caregiver types, controlling for socio-demographic characteristics. Additional testing shows health status is a significant mediating factor, accounting for just over 26% of the effect of caregiving on individual pension value if caring for an adult with disabilities. Caregiving for a working-age adult with disabilities is associated with poorer health status and lower pension savings at both the individual and household levels. Newly adopted policies such as the ABLE Act in the US may provide some support for these families. Additionally, caregiving could be rewarded through the Social Security system, as it is in several European countries, improving the financial strain on these households in their retirement years.