Labour and income effects of caregiving across Europe: an evaluation using matching techniques

This paper offers evidence on the effects of caregiving (i.e. looking after a dependent person within or outside the household) on labour outcomes such as employment, full time employment (conditional on employment), and income for women aged between 30 and 60 across different European countries. It does so by exploiting data from the European Community Household Panel (1994-2001) in order to match women who have become caregivers with “control” women who are deemed to be comparable in all relevant characteristics and compute a non-parametric measure of the effect of becoming a caregiver on the outcomes mentioned above. Our results suggest that, for women who are working before becoming a caregiver there is no statistically significant change in the chances of being employed. However, in the case of women who were not working prior to becoming a caregiver, there is a statistically significant decrease in the chances of entering employment. We also detect a negative and significant effect on labour income, which tends to be offset by a parallel increase in social transfers, except in the case of women with low levels of education in the Southern countries.