Panel Paper: Unemployment Insurance and Caregiving

Friday, November 8, 2019
Plaza Building: Concourse Level, Governor's Square 17 (Sheraton Denver Downtown)

*Names in bold indicate Presenter

Yulya Truskinovsky, Wayne State University

The US population is rapidly aging, and the growing need for long term care is often met by adult children, many of whom juggle caregiving and work. While a growing body of work demonstrates that caregiving interferes with employment, here is little evidence about how social insurance policies are leveraged by family caregivers. This paper considers the role of caregiving during periods of involuntary unemployment and, specifically, the role of Unemployment Insurance (UI) in caregiving and future employment trajectories. By changing the opportunity cost of time during unemployment spells, UI changes the tradeoffs faced by beneficiaries. Previous research has found that UI receipt reduces job search effort, increases consumption, and increases investments in higher education (Meyer, 1990; Gruber, 1997; Barr & Turner, 2015). How caregiving behavior changes in this context is an open question.

Using state-level variation in the generosity of UI benefits and several nationally representative longitudinal surveys that capture both employment and caregiving outcomes, I examine the effects of UI benefits on the likelihood of starting caregiving, the length of caregiving stints, the length of unemployment spells, and subsequent employment trajectories. I use state-level changes in the maximum weekly benefit amount and duration between 1991 and 2010, which includes the timing and magnitude of UI expansions following the Great Recession to explore the causal effects of UI generosity on caregiving behavior. Descriptive analysis using the American Time Use Survey (ATUS) show that recently unemployed individuals are more likely to be providing care, and this propensity varies by state. Further analyses are in progress.

By replacing lost income for a fixed (maximum) period, UI provides a unique experiment to study the role of wage replacement for caregivers separately from the role of job protection, with the important caveat that it covers involuntary periods of joblessness, while family leave policies cover voluntary (and planned) absences. These policy design features are bundled together in the case of paid family leave, while the Family Medical Leave Act (FMLA) provides job protection without wage replacement. Comparing the impact of the FMLA to paid family leave for new mothers suggests that the wage replacement component is key, especially for low-income families (Rossin-Slater, Ruhm, & Waldfogel, 2012).

Through subsidizing caregiving spells, UI also provides further insight into the effects of policies that promote subsidizing family members who might otherwise be working to care for relatives. Additionally, if the availability of UI extends short-term informal caregiving capacity while reducing the use of formal care (Arora & Wolf, 2018), it will highlight another way in which the availability and generosity of state UI programs have broad welfare benefits beyond providing wage replacement for displaced workers. In the context of a rapidly aging US population, where much of the need for eldercare is met by working age adult children, this work will provide knowledge about how social insurance policies that provide wage replacement can support the growing need for long-term care.