Investigating the causal relationship between employment and informal caregiving of the elderly

Objective: Examining the causal relationship between employment and informal caring to date has been impeded in countries like Ireland where there is a lack of suitable panel data and/or variables for instrument construction. This paper employs propensity score matching to control for non-random selection into treatment and control groups which controls for differences in employment outcomes between carers and non-carers in Ireland using data from Quarterly National Household Survey 2009 Quarter 3. Earlier papers focus on using regression techniques which may lead to biased estimates. Results: Results suggest that differences exist between carers and non-carers with respect to their employment status in Ireland. Overall the results suggest that the effects are more significant for those providing greater hours of informal care per week than those providing fewer hours of care per week. The effects estimated in this paper are likely to be more precise as failing to account for potential biases in the relationship are likely to underestimate the true effect of caring on employment outcomes. We find that propensity score matching provides an alternative method of examining the relationship when suitable panel data and/or variables for instrument construction are not available.