Working and caring. The simultaneous decision of labor force

Working and caring.
The simultaneous decision of labor force
participation, informal long-term and
childcare services in Mexico
Edwin van Gameren
El Colegio de México – Centro de Estudios Económicos
Durfari Janive Velandia Naranjo
El Colegio de México – Centro de Estudios Económicos
Fundación Santa Fe de Bogotá – Centro de Estudios e Investigación en Salud
V Congreso de Economía de la Salud de América Latina y el Caribe
Montevideo, Uruguay - 14, 15 y 16 de noviembre de 2012
Long-term care and child care in Mexico
A specialized long-term care market (home care and institutional care for the
elderly) is small and unaffordable for the major part of the population.
Childcare services are available mainly through the social security system for
formal employees
Both care activities are largely family-based
Population aging, smaller families, and changes in traditional roles may change
the decisions regarding labor and care
Purpose of the paper
Analyze which factors determine the decision to participate in the labor market, to
provide care to the elderly, and to provide care to the (grand)children in Mexico
Theoretical background:
integration of long-term care and childcare
Three-generation modeling framework where elderly care is motivated by
demonstration effect (Giménez et al. 2007, 2008; Cox & Stark 2005):
 Older generation (elderly care)
 Middle generation (caregivers)
 Younger generation (childcare)
Explain allocation of parental time among three activities: labor market, child care,
and elderly care.
max U=U(C, Q, T, Ug)
C=C(ew, y)
monetary budget restriction
T=T(t, ew, y)
elderly care
Q=Q(h, αt, ew, y)
child quality
h=h(m, t, e)
time budget restriction
C=consumption, Q=child quality, T=elderly care, Ug=utility of grandparent, e=hours worked, w=hourly
wage, t=time spent on elderly care, h=time spent on childcare, α=demonstration effect, m=available time
Empirical strategy: simultaneous decision
Reduced form model. Three-equation SUR Probit model
Tl’= γl + Xjβjl + εl, Tl’ worked in the labor market (1,0)
Te’= γe + Xjβje +εe, Te’ informal elder care given (1,0)
Th’= γh + Xjβjh +εh, Th’ childcare given (1,0)
where Ti’=1 if Ti>0 and Ti’=0 if Ti<0 (with Ti latent variables), for i=l, e, h
Xj contains individual and household characteristics; γl, γe, and γh are constant
coefficients and εl, εe, and εh are (correlated) errors.
Panel survey Mexican Health and Aging Study, MHAS (in Spanish: Estudio
Nacional sobre Salud y Envejecimiento en México, ENASEM). Wave 2001
Nationally representative sample for Mexicans aged 50 years and more. Total
sample size in 2001 of 15,186 individuals.
Sample for empirical estimation: 6043 women between 45-70 years old
Dependent variables are derived from the questions:
LFP: “Last week you …?”, where the answers “Worked”, “Did not work, but
you had a job” value as positive on the indicator, zero otherwise;
Elderly care: “In the last 2 years, did you (or your spouse) help your parents
with basic personal activities such as dressing, eating or bathing because of a
health problem? Exclude help with household chores, errands, and
Childcare: “In the last two years, have you (or your spouse) spent at least one
hour a week, helping your children/their spouses/your grandchildren (or those
of your spouse)?”
Descriptive statistics
Descriptive statistics
Descriptive statistics
Descriptive statistics: dependent variables
Descriptive statistics:
independent variables
Parental information
Children & grandchildren
Alive; healthy; living situation
Young househ. memb. (<5, 5-12, 12-18)
Resident, nonresident grandchildren
Socio-demographic situation
Socio-economic situation
Age; Education; Urbanization; Indigenous
Wealth; Nonlabor income; Spousal income;
Access to health services; Pension rights
Health information
SAH; ADL, IADL problems; chronic disease;
mental health
Note a :
Scenario A: One parent alive, in need of care and cannot be left alone, three grandchildren aged under 5
in the household.
Scenario B: Three parents alive, of which only one with care needs while all can be left alone, one
grandchild aged 12-18 in the household.
Scenario C: Same as scenario B, except that none of the parents have care needs.
Care needs are the driving force behind the caregiving activities, much
more than the economic situation;
The presence of elderly strongly raises the probability that the respondent
performs long-term care activities, especially if the elderly have health
problems, while there are some indications for an interaction with
childcare activities;
The presence of young grandchildren raises the probability that the
respondent performs childcare activities, while it slightly reduces the
probability of labor market activities;
Hence, care needs have a strong effect on the care activity that it requires,
but also some effect on other activities;
The reduction in the probability of caregiving is not compensate by an
increase in the probability of labor force participation.
Thank you!
Dank u wel!
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