Caregiving subsidies and spousal early retirement intentions

Joan Costa-Font and Cristina Vilaplana-Prieto

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Balancing caregiving duties and employment can be both financially and emotionally burdensome, especially when care is provided to a spouse at home. Caregiving subsidies can play a role in helping caregivers to cope with such duties. This paper demonstrates how providing financial respite for caregivers can influence individuals' decisions to retire early. We investigate the impact of a reform that extended long-term care (LTC) benefits (in the form of subsidies and supports) on the intention of a caregiving spouse to retire early in Spain. We subsequently examine the effect of austerity spending cuts reducing such publicly funded benefits, and we compare the estimates to the effects of an early retirement reform among private sector workers around the same time. Our preferred estimates suggest evidence of a 10pp reduction in early retirement intentions after the extension of LTC benefits even though the effect is heterogeneous by type of benefit. Consistently, austerity spending cuts in benefits are found to weaken retirement intentions. Even more importantly, our estimates suggest that cuts in caregiving subsidies exert a much stronger effect on early retirement intentions than actual early retirement reforms.

Keywords: long-term care; employment; retirement; informal care; caregiving subsidies; home care (search for similar items in EconPapers)
JEL-codes: I18 J14 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2023-10-01
New Economics Papers: this item is included in nep-age, nep-eur and nep-hea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in Journal of Pension Economics and Finance, 1, October, 2023, 22(4), pp. 550 - 589. ISSN: 1474-7472

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http://eprints.lse.ac.uk/114908/ Open access version. (application/pdf)

Related works:
Journal Article: Caregiving subsidies and spousal early retirement intentions (2023)
Working Paper: Caregiving Subsidies and Spousal Early Retirement Intentions (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:114908

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