As Adult Children Are Called on to Tend to Ailing Parents, Retirements Suffer

By Chris Adams

Health care costs are growing rapidly in the United States – no surprise there – and now make up nearly 18 percent of the nation’s economy. But there are plenty of health costs that aren’t even accounted for in that figure.

In fact, when it comes to the elderly and the end-of-life costs for long-term care, more than three-quarters of care is “informal,” meaning it’s delivered by family members, not a health care professional or a facility.

The impact of those caregiving arrangements is the focus of work by Kathleen McGarry, an economist at the University of California, Los Angeles, and a research associate at the National Bureau of Economic Research.

“The vast majority of it is informal care,” she said. “Much of what ends up happening is the family ends up being responsible – and that’s a health care cost that is missing from our national numbers.”

In a session with National Press Foundation fellows, McGarry described what happens when people pull themselves out of the workforce to care for ailing parents.

Using data from the federally-funded Health and Retirement Study, McGarry found that caregiving had a negative effect on work, whether measured in employment status or hours worked. It also has long-term consequences: People who have been caregivers are less likely to be working years later and are likely to have lower earnings.

This program is funded by the Alfred P. Sloan Foundation. NPF is solely responsible for the content.

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