Informal caregiving remains a significant phenomenon in the United States with a high opportunity cost, although it remains more economical (in the aggregate) than skilled paid care.

The Opportunity Costs of Informal Elder-Care in the United States

New Estimates from the American Time Use Survey

Amalavoyal V. Chari, John Engberg, Kristin Ray, Ateev Mehrotra

ResearchPosted on rand.org 2014Published in: HSR, Health Services Research, v. 50, no. 3, June 2015, p. 871-882

OBJECTIVES: To provide nationally representative estimates of the opportunity costs of informal elder-care in the United States. DATA SOURCES: Data from the 2011 and 2012 American Time Use Survey. STUDY DESIGN: Wage is used as the measure of an individual's value of time (opportunity cost), with wages being imputed for nonworking individuals using a selection-corrected regression methodology. PRINCIPAL FINDINGS: The total opportunity costs of informal elder-care amount to $522 billion annually, while the costs of replacing this care by unskilled and skilled paid care are $221 billion and $642 billion, respectively. CONCLUSIONS: Informal caregiving remains a significant phenomenon in the United States with a high opportunity cost, although it remains more economical (in the aggregate) than skilled paid care.

Key Findings

  • Informal (unpaid) caregiving by family members and friends is the primary source of long-term eldercare in the United States.
  • Family members and friends spend an estimated 30 billion hours each year caring for the elderly.
  • The annual cost of this informal caregiving—measured by estimating income lost during the time that unpaid caregivers spend on eldercare—is $522 billion.
  • Replacing informal care with unskilled paid care at minimum wage would cost $221 billion a year; replacing it with skilled nursing care would cost $642 billion a year.
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Document Details

  • Copyright: Health Research and Educational Trust
  • Publisher: John Wiley & Sons, Inc
  • Availability: Non-RAND
  • Year: 2015
  • Pages: 12
  • Document Number: EP-66196

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