Duke 2008 | ASHE | Equity and Efficiency in Health and Healthcare

Due to trends in population aging, the determinants of the demand for paid long-term care (LTC) services are of particular policy importance. One key determinant of the future demand for paid long-term care is the supply of informal support for older adults with disabilities, much of which is provided by older adults' middle-aged daughters. Understanding the supply of informal support is important for projecting long-term care demand and also for designing policies to promote informal supports for disabled older adults. This research aims to assess the causal effects of middle-aged women's employment on their provision of informal support to their disabled parents. I focus on one specific form of informal support: co-residence with an older, disabled parent. While descriptive evidence suggests an inverse relationship between employment and co-residence with a disabled parent, the endogeneity of the relationship complicates causal inference. To address this problem, I identify the effect of employment on the probability of co-residing with a disabled parent by exploiting the plausibly exogenous increases in employment incentives for certain groups of women over the 1990s. I use U.S. census data to estimate difference-in-difference-in-difference reduced form models of co-residence for single women ages 30-50. I compare women with and without children, with high education and low education, and between 1990 and 2000. These models suggest that the groups of women who experienced the biggest increases in employment incentives had a statistically significant one percent reduction in the probability of co-residence (compared to a sample mean of four percent of women co-residing with disabled parents). These results are robust to controlling for compositional changes in the comparison groups over time and to controlling for state long-term care policies and macroeconomic conditions. To get a more direct estimate of the effect of employment on the probability of co-residence, I estimate bivariate probit models of any employment in the past year and co-residence with a disabled parent. The bivariate probit models are identified using the same triple-difference strategy as in the reduced form models. The bivariate probit results are consistent with the reduced form results, and suggest that employment significantly reduces the probability of co-residing with a disabled parent. These estimates are some of the only evidence on the effect of employment on the delivery of informal support to older, disabled adults that address the endogeneity in the relationship. These findings may help inform projections of the future demand for paid LTC. They also suggest that a potential unintended consequence of policies to promote employment may be a reduction in the supply of informal support to older adults with functional limitations.