The wage penalty for informal caregivers from a life course perspective

Abstract

Caring for a friend or family member in need of care has been found to have negative consequences for wages. This study contributes to the literature by studying how three major life course factors, namely timing of first caregiving, duration of caregiving, and the number of caregiving episodes, help to explain the (hourly) wage penalty for informal caregivers (i.e., providers of health-related care to older or disabled people in the personal network). We used unique retrospective data of 1417 informal caregivers in the Netherlands that map start and end dates of up to seven caregiving episodes. Findings showed that a higher number of caregiving episodes was related to a stronger wage penalty, whereas timing of first caregiving was not associated with a wage penalty. Opposite to our expectation, we found that the wage penalty decreased the longer someone cared, potentially even resulting in a wage premium for long-time caregivers. We conclude that applying a life course perspective is relevant when examining employment consequences of informal caregiving and that caregiving possibly fosters skills that are beneficial for employment careers in the long run.