Unexpected negative health shocks of a parent may reduce adult children’s labour supply via informal caregiving and stress-induced mental health problems. We link administrative data on labour market outcomes, hospitalisations and family relations for the full Dutch working age population for the years 1999-2008 to evaluate the effect of an unexpected parental hospitalisation on the probability of employment and on conditional earnings. Using a difference-in-differences model combined with coarsened exact matching and individual fixed effects, we find no effect of an unexpected parental hospitalisation on either employment or earnings for Dutch men and women, and neither for the full population nor for subpopulations most likely to become caregivers. These findings suggest that the extensive public coverage of formal long-term care in the Netherlands provides sufficient opportunities to deal with adverse health events of family members without having to compromise one’s labour supply.

Journal of Health Economics
Department of Applied Economics

Rellstab, S., Bakx, P., García-Gómez, P., & van Doorslaer, E. (2019). The kids are alright - labour market effects of unexpected parental hospitalisations in the Netherlands. Journal of Health Economics, accepted. Retrieved from http://hdl.handle.net/1765/122382