The cyclicality of informal care

Abstract

This paper measures the cyclicality of an important input into elderly health: informal care. Using independent survey measures of informal caregiving and care receipt over the past two decades, we find that informal care from adult children to their elderly parents is countercyclical. By contrast, informal care from spouses is procyclical among individuals in their sixties. We find little corresponding change in the use of formal care, highlighting the potential for unmet care needs across the business cycle. These findings suggest that informal health inputs may play an important role in the interpretation of the cyclicality of elderly mortality.