The Economic Cost of Unpaid Care to the Public Finances: Inequalities in Welfare Benefits, Forgone Earnings-related Tax Revenue, and Health Service Utilisation

Abstract

There is limited research on the effect of unpaid care on the public finances, and on the inequalities present when providing support to those with caring responsibilities. The aims of this research are to estimate the overall costs to the State of providing care, and to identify sub-groups of carers with relatively greater costs to the government who may need more support. We used waves eight to ten from the United Kingdom Household Longitudinal Survey and performed two-part Generalised Linear Models and Propensity Score Matching. We found that providing care is associated with excess and potentially avoidable costs to government in terms of forgone earnings-related tax revenue, welfare benefits, and health service use. Older carers have lower healthcare costs, indicating, perhaps, issues related to accessing to services due to their role (as they may neglect their own health, worry about safety and costs of public transport). Older carers were also found to have lower levels of welfare benefits, suggesting challenges associated with applying for support (such as navigating cumbersome application processes and stigma-related barriers).