The Long-Term Costs of Caring: How Caring for An Aging Parent Impacts Income and Wealth Over Time

Purpose: Informal caregivers are the backbone of the long-term care system in the United States, and reliance on informal care is growing. Unfortunately, not much is known about the financial impacts of the caregiving experience, especially long-term. Some evidence suggests that caregivers may experience lost wages, forgone promotions, and other costs as a result of their caregiving responsibilities. Research on the financial implications of caregiving have been largely cross-sectional, however, and often use data that is not nationally representative. The purpose of this study was to examine how caregivers’ income and wealth are impacted by the experience of providing care to an aging parent over time, using longitudinal, nationally representative data.

Methods: Latent growth curve modeling was used to analyze data from six waves of the Health and Retirement Study (1998-2008). Starting with an initial sample of 3107 respondents, aged 51-67, who were not serving as caregivers but who had at least one living parent, income and wealth trajectories were examined separately to test whether caregiving was negatively associated with trajectories over time. Covariates included age, race, gender, education, marital status and self-reported health.

Results: Findings suggest that while caregiving does not have a negative impact for everyone, it is associated with lower income trajectories for at least 15% of respondents, and has marginal significance for an even larger group. Interestingly, caregiving also had an impact on wealth, but only for a very small group (4.3% of respondents). Among those impacted by caregiving, being single, widowed or divorced is negatively associated with income trajectories, and race and education are also significant predictors of membership in this affected group.  Race and education were also predictors of membership in the group for whom caregiving had a negative impact on wealth. As expected, declining health was also associated with lower income and wealth trajectories.

Implications: The results suggest that while not everyone who provides care for an aging parent experiences lost income and wealth, some do – and, importantly, caregiving may exacerbate financial insecurity among already vulnerable groups. The impact of lost income has the potential not only to affect caregivers in the present, but may also have long-term impacts on retirement preparation, since lower income leads to lower contributions to Social Security, and, for some, negatively impacts other savings. Future policy reforms should prioritize supports for vulnerable caregivers, since they are most likely to suffer long-term, negative financial consequences from their caregiving experience.