Even short-term caregiving, however, can have labor market consequences, such as needing to take leave or the lack of flexibility. Image: AnnaStills/Shutterstock.com
By: FEDweek StaffMuch of the cost of family caregiving for older adults falls on the caregivers but existing policies that can help them “are often limited and piecemeal, and vary dramatically by state,” says a study by the Center for Retirement Research at Boston College.
“While family caregivers are the backbone of the long-term services and supports (LTSS) system of care, caregiving is challenging and often comes at a financial cost for caregivers, from both the direct costs incurred in providing care and the reduced labor market earnings in order to provide caregiving. As a result, many caregivers could end up jeopardizing their own retirement security,” it says.
Direct costs can include expenses such as “making home modifications or additions, or acquiring more accessible transportation options,” it says, adding that a recent separate survey found that nearly four-fifths of caregivers incur such costs, which on average represented about a quarter of their income.
“The larger financial cost for caregivers is the labor market cost. Prior research has found that family caregivers are more likely to reduce the number of hours worked, switch to jobs that are less demanding with lower pay, stop working altogether, or retire early due to caregiving responsibilities,” it says.
“Not surprisingly, caregivers who provide more care face a larger negative impact on their work and earnings,” it adds, with caregivers who provide more than 20 hours of care a week are “much more likely” to cut back hours or retire early. “Even short-term caregiving, however, can have labor market consequences, such as needing to take leave or the lack of flexibility,” it says.
However, policies such as paid sick leave and paid or unpaid family leave vary by employer and state—the federal government offers each kind to its employees—and the child and dependent care tax credit is limited to $6,000 and is available only to those who itemize deductions on their tax returns, it says.
It added that in focus group discussions with caregivers, paid leave was much less desired than direct payments to alleviate costs—a preference that applied across all socioeconomic and demographic groups.
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