Do Unpaid Caregivers Save Less for Retirement?

Abstract

Unpaid caregiving has always been widespread in the U.S. and is a growing phenomenon, especially in response to an aging population. Unpaid caregivers can experience adverse labor market outcomes such as less pay, fewer hours at work, and greater job instability. These negative labor market outcomes could translate into lower retirement savings. Our analysis of the Federal Reserve’s Survey of Consumer Finances indicates that unpaid caregivers have lower retirement savings because they are less likely to participate in retirement plans at work and have lower contributions relative to pay. Single women, in particular, see declines in retirement security associated with unpaid caregiving. That is, caregiving further exacerbates an already existing retirement income security gap by gender. The data thus lend support to efforts to increase access to retirement savings plans for people with less job stability and fewer hours and to give more people paid sick leave at their job.