Labor market-specific effects of family care needs

Caring for parents is increasingly becoming a labor market stress test for many working people in Austria. A recent EcoAustria study commissioned by ERSTE Foundation comes to the conclusion that the need for family care is a measurable trigger for part-time employment, early retirement, the use of partial retirement and withdrawal from working life. The study is based on comprehensive microdata analyses and is the first to shed light in detail on the extent to which the care needs of parents or parents-in-law influence the employment behavior of their children.

The results are clear: those who look after parents in need of care are significantly more likely to reduce their own working hours or leave the workforce partially or completely. These effects are particularly pronounced among women. There is a clear trend towards part-time employment and partial retirement in order to cope with the increasing time conflicts between work and care. Men, on the other hand, are less likely to switch to part-time employment and partial retirement and in some cases even show an increase in their employment - which indicates substitution effects within the household. The study also shows that employees who leave the labor market or reduce their working hours due to family care responsibilities rarely return to their original employment afterwards. In many cases, leaving the labor market appears to be permanent. Extrapolated to the age group concerned, this results in a potential loss of up to 9,200 full-time equivalents that could be withdrawn from the labor market due to care responsibilities.

A key finding of the study concerns the use of various options of part-time employment or partial retirement, work-related inactivity or early retirement as a "silent bridge" between gainful employment and care. It is to be expected that the time conflicts between care and gainful employment will intensify with demographic developments. As the baby boomers move into the affected age groups, they will actively provide care more frequently and later these age groups will themselves need care more often, thus triggering time conflicts.

EcoAustria therefore calls for a reorientation of the labor market policy framework that takes care responsibilities into account in a targeted manner. In an ageing society, the conclusion is that it is no longer enough to rely on individual solutions within families. Instead, structural policy responses are needed that make gainful employment and caregiving more compatible - conversely, the available labor market policy resources must be used in a targeted manner to ensure the functions of the labor market.