Jan 1, 2014
Family members and friends are the primary source of long-term care for the elderly in the United States. There is little doubt about the significance and size of this informal, unpaid workforce — a recent study found that one in five adults provides regular care for an elderly relative or friend — but estimates of the costs of this care are out of date. And informal care is in no way "free." These caregivers are giving up valuable time, either from their jobs or from other potentially productive activities. So what is the annual price tag of this informal care?
New and unique data from the American Time Use Survey (ATUS) can help us answer this question. In 2011, the ATUS, which is conducted by the U.S. Census Bureau, began collecting precise information about the amount of time people spend each day helping elderly relatives and friends.
RAND researchers measured the opportunity costs — or forgone earnings — of informal elder care by assigning a monetary value to the time people spent providing this care. For employed caregivers, researchers used an hourly wage to calculate costs; for unemployed caregivers, they used an estimated hourly wage based on age, education, and gender. Their findings are as follows:
Informal caregiving is a significant economic burden in the United States, especially for working adults. Findings from this study underscore the need for workplace flexibility policies that provide paid time off for caregivers, as well as the potential value of Medicaid's Cash and Counseling program, which gives elderly Americans a budget for their caretaking needs. Because informal care is cheaper, on the whole, than skilled care, paying family members rather than skilled nursing caregivers would be less costly to society.