Who Pays for Eldercare in the US? Women and the Economy

Clara Wilson

The disproportionate pressure unpaid care responsibilities place on women negatively impacts their ability to work paying jobs and has adverse financial consequences. Even though women provide unpaid care to a wide spectrum of individuals, policy conversations around facilitating the employment of women have often primarily centered around alleviating mother’s child caregiving responsibilities. While policies aimed to reduce the barriers that child caregiving has on mothers in the labor force are critical and necessary, solely investing in those policies is not enough to ensure women have equal access to paying jobs. There also needs to be an investment in eldercare; women provide the bulk of the unpaid care for their elderly family members as well.

In the United States, families, typically women within families, provide a majority of eldercare in the form of unpaid family caregiving. Alternative forms of eldercare like nursing homes are typically reserved for older adults, mainly 85 years old or older, that require around-the-clock care due to severe illness or disabilities. Home care and community-based care is another alternative; however, cost and availability make it a less common option. As a result, there are 42 million unpaid elder caregivers, and 61 percent of these care workers are women, particularly wives and daughters. By 2030, 20 percent of the American population will have reached the retirement age causing the prevalence of women providing unpaid eldercare to increase substantially.

Women who provide unpaid eldercare are eight percent less likely to work. For those who do work, balancing family caregiving with employment responsibilities can lead to lower wages for women because they are more likely to decrease their hours, pass up work promotions, switch from full-time to part-time work, and take a leave of absence. Consequently, women that provide unpaid eldercare are more likely to live in poverty and are five times more likely to receive Supplemental Security Income than women who do not provide unpaid care.

In addition to the financial burden, unpaid caregiving can negatively influence caregivers’ health. The stress of caregiving takes a toll causing 23 percent of unpaid caregivers to report that their care work worsened their health. On average, unpaid elder caregivers spend over 20 hours a week providing care. Balancing that many hours on top of working full time can lead to anxiety, depression, social isolation, and caregiving burnout.

There needs to be an investment in eldercare to support women and families, because accessing affordable care for older adults is far too challenging. In the last 10 years, the cost of direct care for older adults has increased by 23 percent. Additionally, the median annual cost for nursing homes is 90,000-102,000 dollars, 51,000-53,000 dollars for home-based care, and 20,000-49,000 dollars for community-based care. Medicaid can be used to supplement direct care for older adults who qualify. However, due to the inadequate supply of direct care professionals, there is currently a backlog of over 800,000 older adults or people with disabilities, who are currently on waiting lists for home-based care.

The Biden Administration has made it a priority to invest in eldercare. Biden’s American Jobs Plan calls for an investment of 400 billion to improve the eldercare infrastructure by increasing the wages and benefits of paid care workers and Medicaid funding for home care and community-based care. Biden’s proposed investment would add approximately 1.1 million jobs to the economy and give more women the opportunity to enter the workforce. A recent Harvard study found that the labor supply increases when families have access to home-based and community-based care through Medicaid. This is because daughters are more likely to work full-time when they do not have to provide extensive care for their parents.

Ultimately, Biden’s plan for eldercare investment is an important and critical step in the right direction. However, improving the eldercare infrastructure cannot end with the American Jobs Plan, because prioritizing increasing Medicaid funding for home and community-based care does not reduce the cost of eldercare for the majority of older adults who do not qualify for Medicaid. Additional policy measures will be needed to make eldercare affordable for all families. As the United States population ages, failure to provide affordable eldercare options for families could have disastrous impacts on the economy and the female labor force participation rate since women bear the brunt of unpaid elder caregiving.