Work in progress

Working longer or caring for your loved ones? The effect of delaying retirement on the long-term care use of one's partner and parents, with Suzanne Vissers & Alice Zulkarnain.

Abstract: We assess the effect of retiring later on the formal long-term care (LTC) use by relatives. As the population ages, governments seek to contain LTC spending, while also encouraging the extension of working lives. Yet postponing one's retirement may lead to less time devoted to caring for relatives with care needs, and to spillovers into higher use of formal LTC options and health effects. We exploit a Dutch reform that gradually increased the Statutory Retirement Age (SRA) in a (fuzzy) Regression Discontinuity approach. By comparing those born right before and after a given SRA-increase, we relate the work status of individuals with the LTC use and mortality of their parents and partner. We focus on outcomes in the 3 months when an individual would have been able to retire, absent their cohort-specific increase in the SRA. We use exhaustive administrative data, that allows for the linkage of an individual's information to that of their relatives. Working longer does not affect the LTC use by partners. Among parents, we find no effect on nursing home admissions. However, delaying retirement leads to higher spending on home health care, but markedly less use of social care by one's parents. We also find that delaying retirement leads to an increased mortality risk among partners and parents. Raising the retirement age can lead to spillovers on formal LTC-use by relatives and on their health. Higher home health care use may be explained by a substitution with informal care or to health effects. The counter-intuitive finding on social care might be due to the reduced help from adult children in navigating the application process.