The effect of grandchildren on grandparental labor supply: Evidence from Europe

Andreas Backhaus and Mikkel Barslund

European Economic Review, 2021, vol. 137, issue C

Abstract: Grandparents at working age frequently take care of their grandchildren. These time transfers may constrain the formal labor supply of grandparents. Using an instrumental variable strategy and multiple waves of the Survey of Health, Ageing and Retirement in Europe (SHARE), we estimate the causal effect of grandparenthood on the labor supply of working-age grandparents in ten European countries. We find a large negative impact of grandparenthood on the employment rate of women aged 55 to 64. The effect is particularly pronounced in countries where the availability of formal childcare is low. A complier characterization reveals that the large LATE applies to a small but not selected group of potential grandmothers and may explain a substantial share of the gender gap in employment at later working age. Male labor supply does not significantly adjust in response to grandparenthood. We further find that grandmothers are more likely to transfer gifts to their children than women who are not grandmothers, whereby grandmothers substitute between time and gift transfers.

Keywords: Labor supply; Grandchildren; Gender; Retirement; Europe (search for similar items in EconPapers)
JEL-codes: D10 J13 J14 J22 J26 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0014292121001598
Full text for ScienceDirect subscribers only

Related works:
Working Paper: The Effect of Grandchildren on Grandparental Labour Supply: Evidence from Europe (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:137:y:2021:i:c:s0014292121001598

DOI: 10.1016/j.euroecorev.2021.103817

Access Statistics for this article

European Economic Review is currently edited by T.S. Eicher, A. Imrohoroglu, E. Leeper, J. Oechssler and M. Pesendorfer

More articles in European Economic Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().