Increasing States’ Minimum Wage Rates: Do Increased Opportunity Costs Affect Informal Elder Caregivers? Open Access
Sroczynski, Nolan (Summer 2019)
Abstract
Informal elder caregivers—individuals age 18 to 64 who provide care to an individual or individuals age 65 and older—provide a valuable service not only to the recipient, but also the healthcare system through free labor. However, these caregivers must optimize their own welfare through labor and leisure activities just as non-caregivers do, and their decision to be employed could impact their decision to provide such informal care and/or how much time they have to spend on themselves if they continue to provide care. If informal caregivers reduce time spent providing such care and it is substituted with formal care, the additional burden will likely be placed on the Medicaid system, which pays for the majority of long-term services and supports.
This study exploits the variation in state minimum wage rates to analyze whether the increased opportunity cost of an increase in the minimum wage rate results in labor market changes and amount of time spent on the personal care of the caregiver. Utilizing the combined American Time Use Survey and Current Population Survey data, a difference-in-difference methodology was applied with controls for state-level, caregiver, and recipient confounders. When minimum wage increases, the likelihood of employment among male informal caregivers also increase. There are no statistically significant employment effects for females, nor any significant effects for males or females on personal care time or sleep time. As localities, states, and federal institutions explore increases in minimum wage, one should consider the potential for unintended consequences in a cost-benefit analysis.
Table of Contents
Introduction 1
Literature Review 7
Eldercare in the United States 9
Government Incentivization of Employment 12
Theoretical Models 13
Previous Literature 16
Conclusion 31
Methods 32
Theoretical Framework 33
Research Design 38
Measures 44
Analytic Strategy 51
Results 67
Discussion 78
Study Strengths and Limitations 80
Implications of the Study Results 82
Recommendations for Future Research 85
References 87
Appendix 97
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