Effect of Caregiving on Employment for Senior Workers in Japan

Abstract

Policymakers worldwide focus on the implementation of policies to improve the work-life balance of senior workers considering long-term family care. We examine the relationship between parental caregiving and labor force participation, as well as work hours, for senior workers in Japan, where elderly care remains a crucial policy issue. We use large-scale government panel data for the years between 2007 and 2014. We consider the status of living with a parent and endogenous problems concerning the decisions of caring for parents while keep working. We also consider the time-invariant heterogeneities using fixed effects regressions, and the time-variant heterogeneities using fixed effects with instrumental variable regressions. We find that caregiving has a smaller impact on labor force participation than in previous studies, for both senior female workers living without a parent and male workers regardless of the living-with-parent status. Females workers living with a parent show a significant reduction of labor force participation, even after considering the time-variant heterogeneities. Caregiving has no significant effect on the reduction of work hours. We suggest that policies to encourage the transition to reduced work hours, while continuing to work utilizing flexible working arrangements should be actively implemented.