The nature and impact of caring for family members with a disability in Australia

Research Report No. 16 – June 2008

11. Selected labour market issues for female carers: Literature review and empirical findings

Matthew Gray, Ben Edwards and Norbert Zmijewski

Introduction

Understanding the impact of long-term caring on participation in the labour market is of crucial importance to social policy in coming decades, given projected increases in the demand for informal care providers. It is important, not only for the economic wellbeing of carers, but also from a national economic perspective, given projected labour shortages associated with an ageing population and increasing dependency ratios.

Primary carers of an adult or a disabled child have lower rates of employment and labour force participation than those without caring responsibilities of this nature. It is estimated, after taking into account age and gender differences, that the employment rate of Australian primary carers in 2003 was 42.8%, which is lower than the Australia-wide average of 59.2% (Access Economics, 2005).83 The main reason for the lower employment rates of carers is a much lower full-time employment rate (19.2% for carers and 42.0% for the Australia-wide average). The part-time employment rates are slightly higher for carers (22.8%) than the Australia-wide average (17.2%).

To date, there has been relatively little Australian research into the impact of caring responsibilities on the labour force status of carers. There has been even less research specifically on the labour force status of carers who receive Carer Payment and/or Carer Allowance, a group of particular policy interest. Two recent Australian studies have used longitudinal data to analyse the impact of caring responsibilities on labour market participation (Bittman et al., 2007; Lee & Gramotnev, 2007).84

Understanding the impact of long-term caring upon labour market participation is particularly important, given the growth in recent years in the number of people requiring care, and projections that the demand will continue to grow in coming decades (e.g. NATSEM, 2004).85 The increasing demand for carers is in part a consequence of the structural ageing of the population (e.g., NATSEM, 2004). It is also a consequence of the shift from institutional to community care for adults with a disability. There is some evidence that this shift has increased the burden on carers (Tolhurst, 2001).

In this chapter, we use the FCPDS data to analyse a number of labour market issues for people of working age who provide ongoing care to persons with disabilities, long-term health conditions or older persons and who receive an Australian government payment that is directed towards carers (Carer Allowance and Carer Payment).

There are a number of reasons for expecting significant caring responsibilities to reduce the likelihood of carers being in paid employment or, if employed, working less hours. The time taken to provide care may be incompatible with paid employment. The jobs available to the carer may require particular working hours, or may have insufficient flexibility to allow the carer to provide care as well as sustain paid employment.

Although the employment rate of primary carers is much lower than the Australia-wide average, these differences cannot necessarily be interpreted as being a consequence of caring. There are a number of other possible explanations. First, carers may have, on average, different human capital and demographic characteristics than non-carers, which could explain part or all of the differences in employment rates. Second, the decision as to who cares within a family may be related to labour market opportunities, with family members who have fewer labour market opportunities being more likely to take on the primary carer role.86 Third, potential carers who have a good labour market earnings capacity may decide to purchase formal care rather than provide care themselves in order to allow participation in the labour market. Economic models suggest that people whose hourly labour market earnings exceed the hourly costs of formal care will purchase formal care. Of course, beliefs about what is the right thing to do, sense of loyalty and the intrinsic rewards of caring will also be important in decisions as to whether to provide informal care or purchase formal care (see Hales, 2007, for a discussion of these issues).

Although there is some Australian evidence on the labour market outcomes of carers and how they compare to non-carers, there is relatively little Australian research that models the impact of providing care on the labour market participation of the carer. In particular, it would appear that appropriate models of the effects of caring responsibilities on labour force status have not been estimated for Australia. Models should take account of differences in the characteristics of carers and non-carers and the potential selection effect of those with more limited labour market opportunities on taking on caring.87

There has also been relatively little research into the types of employment conditions that can best assist caregivers to combine caring with paid employment. Exceptions include Glezer and Wolcott (2000), Gray and Hughes (2005), and Jenson and Jacobzone (2000).

As discussed in the methodology chapter (Chapter 3), the sample for the FCPDS was selected from the Centrelink administrative database of those receiving Carer Payment and/or Carer Allowance. Carer Payment is an income support payment for those who are unable to participate in the workforce full-time as a result of their caring responsibilities. As outlined in Chapter 2, Carer Payment is means tested (income and asset tests) and eligibility is also dependent on the level of impairment of the care receiver. Carer Allowance is provided to people who provide daily care and attention at home to a person who has a disability or severe medical condition. A more detailed description of the Australian Government payments available to carers is provided in Chapter 2.

Although there is information available on the labour market outcomes for carers from the ABS 2003 SDAC, there is relatively little information available on the labour market outcomes and aspiration of carers who specifically receive Carer Payment or Carer Allowance. As discussed in Chapter 2, eligibility conditions for Carer Allowance and Carer Payment mean that the sample used in the FCPD survey will differ in some important respects from the general population of carers in Australia.

This chapter makes several contributions to the literature. First, it provides a detailed description of the labour force status of carers in receipt of the Australian Government payments: Carer Allowance or Carer Payment; in particular, the extent to which non-employed carers want to be in paid employment. Second, some information on labour market experience since starting to provide care is outlined. Third, information on job changes that employed carers have made as a consequence of their caring responsibilities are described. Finally, the extent to which carers live in jobless households is analysed.

The relatively small sample of employed carers means that some caution needs to be exercised when interpreting some of the data presented in this chapter. There are significant differences in patterns of labour force participation between males and females, so any analysis of labour force status needs to be conducted separately for males and females. The relatively small number of male carers of working age in the sample precludes an analysis of labour market outcomes according to payment type for men.88 The analysis in this chapter is therefore restricted to female carers.

Data issues and definitions

Given that eligibility for Carer Payment is restricted to carers who are unable to participate in the workforce full-time as a result of their caring responsibilities (an eligibility condition that does not apply to Carer Allowance), when analysing labour market issues, it is essential to conduct the analysis separately for those receiving Carer Payment and those receiving only Carer Allowance. This is a departure from much of the analysis in earlier chapters. Analysis of how labour force status varies according to the level of impairment of the care receiver has not been undertaken because whether or not the carer receives Carer Payment is likely to be correlated with the level of impairment.

The categories of labour force status used are fairly conventional. They are: (a) employed full-time (usually works 35 or more hours per week in all jobs),89 (b) employed part-time (usually works 1 to 34 hours per week), (c) unemployed,90 (d) marginally attached (not employed and wants to work, but is not currently looking for work),91 and (e) not in the labour force and does not want to work.

The analysis in this section is restricted to those of working age, who are defined as being in the age range 18-64 years.92

The labour force status of carers

Current labour force status

Table 11.1 shows labour force status for female carers of working age according to the type of payments received - only Carer Allowance or Carer Payment (including those who also received Carer Allowance).

Table 11.1 Labour force status of female carers, by payment type
  Payment type
Carer Allowance only (%) Carer Payment (%)
Employment to population rate - Full-time
11.4
0.8
Employment to population rate - Part-time
35.7
25.2
Employment to population rate - Total employed
47.1
26.0
Unemployment to population rate
6.6
4.6
Not in the labour force to population rate
46.3
69.5
Total
100
100
Unemployment rate
12.3
15.0
Labour force participation rate
53.7
30.6
Number of observations
454
131

Notes: The unemployment rate is defined as the number unemployed divided by the number in the labour force (employed plus the unemployed). The labour force participation rate is the proportion of the population either employed or unemployed. Excludes those aged 65 years or older. Percentages may not total 100% due to rounding.
Source: FCPDS 2006

The full-time employment rate of female carers who receive only Carer Allowance is 11.4% and the part-time employment rate is 35.7%. This gives a total employment rate of 47.1%. As expected, given the eligibility requirements for Carer Payment, just 0.8% of women in receipt of Carer Payment are employed full-time. However, 25.2% are employed part-time, giving a total employment rate of 26.0%.

The unemployment to population rate was 6.6% for those receiving only Carer Allowance and 4.6% for those receiving Carer Payment. The unemployment rate is conventionally defined as the proportion of those in the labour force (that is employed or unemployed) who are unemployed. The unemployment rate was 12.3% for females receiving only Carer Allowance and 15.0% for those receiving Carer Payment.

The proportion of carers who were not in the labour force was quite high; it was 46.3% for those receiving only Carer Allowance and 69.5% for those receiving Carer Payment.

Table 11.2 provides information on the extent to which carers who were not in the labour force wanted to work (marginally attached). The proportion of female carers who were marginally attached (that is not employed, wanted to work, but were not actively looking for work and hence not classified as being unemployed) was very high. Almost one-third (30.2%) of those receiving only Carer Allowance and 35.1% of those are receiving Carer Payment were marginally attached to the labour force.93

The proportion of working-age female carers who did not work at all was quite low, being 16.1% of those who received only Carer Allowance and 34.4% of those receiving Carer Payment (including those who also received Carer Allowance).

Table 11.2 Detailed labour force status for female carers not in the labour force, by payment type
  Payment type
Carer Allowance only (%) Carer Payment (%)
Marginally attached (wanted to work but not actively looking for work)
30.2
35.1
Not in the labour force and did not want to work
16.1
34.4
Total not in the labour force
46.3
69.5
Number of observations
454
131

Note: Excludes those aged 65 years or older.
Source: FCPDS 2006

Labour market experience since commencing providing care

The FCPDS collected information on the employment experience of the carer since they started providing care.94 Among female carers who received only Carer Allowance, 39.7% had not worked since they started caring, 13.2% were not employed at the time of the interview, but had worked since starting to provide care and 47.1% were employed at the time of the interview (Table 11.3). Overall, 60.3% had been employed at some point since starting to provide care. A higher proportion of female carers who were receiving Carer Payment than those receiving only Carer Allowance had not worked at all since starting caring (57.7% and 39.7% respectively).

Table 11.3 Female carers employment status since commencing caring, by type of payment
  Payment type
Carer Allowance only (%) Carer Payment (%)
Currently working
47.1
26.0
Not currently working but has worked since started caring
13.2
16.8
Not currently working and has not worked since started caring
39.7
57.3
Number of observations
454
131

Notes: Excludes those aged 65 years or older. Percentages may not total 100% due to rounding.
Source: FCPDS 2006

Impact of caring on paid employment

As discussed above, differences in the employment rates of carers and non-carers cannot simply be interpreted as the effects of caring on employment rates. While the effects of caring on employment may vary depending upon the stage of the caring, there is evidence that there can be a change in labour force status about the time of starting caring (Spiess & Schneider, 2002).

Changes in employment status since starting caring

Non-employed carers

The FCPDS asked respondents who were not employed at the time of the interview whether they were employed just prior to commencing caring and, if they were employed, whether starting care was the main reason they gave up work.95

Almost half of female carers who were not employed (unemployed and not in the labour force) at the time of the interview were employed just prior to commencing caring (Table 11.4). Interestingly, for female carers there was little difference in the pre-caring labour force status according to which payment type they received - 45.4% of those receiving only Carer Allowance and 47.4% of those receiving Carer Payment were employed just prior to commencing care.

For female carers who were not employed at the time of the interview, but employed just prior to commencing caring, 83.0% of those receiving only Carer Allowance at the time of the interview said that providing care was the main reason they left their job. A similar proportion (78.3%) of those receiving Carer Payment at the time of the interview also said that providing care was the main reason they left their job.

Table 11.4 Employment history since commencing caring of currently non-employed female carers, by type of payment
  Payment type
Carer Allowance only (%) Carer Payment (%)
Employed just prior to commencing caring
45.4
47.4
Not employed just prior to commencing caring
54.6
52.6
Number of observations
238
97

Notes: Two female carers receiving only Carer Allowance answered "don't know" to the question: "Were you employed just before you began to care for the person with a disability?" and are excluded from this table. It also excludes those aged 65 years or older.
Source: FCPDS 2006

Employed carers

Employed carers were asked whether they had considered leaving their current job to care for the person with a disability. It appears that the majority had not - 14.2% of females receiving only Carer Allowance and 26.5% of female carers receiving Carer Payment reported that they had considered leaving their current job to care.

Carers who were employed at the time of the interview were asked whether they had ever had to stop working in order to provide care for the person with a disability. A substantial number of employed female carers reported that they had at some time given up work to provide care for the person with a disability. Among those receiving only Carer Allowance, 39.3% had at some stage had to give up work (Table 11.5). Over half (58.8%) of currently employed women who received Carer Payment left paid employment at some stage to provide care. The small number of currently employed women receiving Carer Payment means that the results for this group need to be treated with some caution.

Table 11.5 Changes to employment made as a consequence of caring responsibilities by female carers, by type of payment
  Payment type
Carer Allowance only (%) Carer Payment (%)
Had to give up work to provide care for the person with a disability
39.3
58.8
Changed jobs or working arrangements in order to provide care for the person with a disability
72.4
79.4
Taken periods of leave to provide care
66.7
58.8
Number of observations
214
34

Note: Excludes those aged 65 years or older.
Source: FCPDS 2006

The majority of employed carers reported having changed jobs or working arrangements in order to provide care for the person with a disability. About three-quarters of employed female carers said that they had changed jobs or working arrangements (72.4% of those receiving only Carer Allowance and 79.4% of those receiving Carer Payment). Changing jobs or working arrangements included reducing hours, adopting flexible hours, quitting a job or taking up another position that provided shorter or more flexible hours.

Over half of employed female carers had to take periods of leave to provide care to the person with a disability. The percentage of carers who had taken periods of leave to provide care to the person with a disability was similar for carers receiving only Carer Allowance (66.7%) and those receiving Carer Payment (58.8%).

Barriers to employment for non-employed carers

Carers who were not employed, but wanted to work, were asked what they saw as their main barrier to finding employment.96 Although what non-working respondents saw as barriers to them being employed needs to be treated with caution, it can provide some useful information.97 The most common barrier reported by female carers who received only Carer Allowance was "difficulty in arranging working hours" (23.0%), followed by "no alternative disability care arrangements available" (22.4%) (Table 11.6). The next most common reason given was that it "would be too disruptive to the person with the disability" (12.7%). Perhaps somewhat surprisingly, the costs of paying for care while at work was not commonly cited as a reason.

The number of female carers receiving Carer Payment who wanted to be in paid employment was relatively small (51 respondents, that is, 5% of the total sample) and so the results for this group should be treated with caution. Overall, the main barriers to employment cited by those receiving Carer Payment was similar to those receiving only Carer Allowance. The main difference was that their age was much more commonly given as a barrier for Carer Payment recipients (17.6%) than those receiving only Carer Allowance (6.7%).

Table 11.6 Main barriers to employment identified by female carers who were not in the labour force but would like to work, by payment type
  Payment type
Carer Allowance only (%) Carer Payment (%)
No alternative disability care arrangements available
22.4
21.6
Would be too disruptive to the person with the disability
12.7
17.6
Difficult to arrange working hours
23.0
15.7
Loss of skills from being out of the workforce
3.0
2.0
Age
6.7
17.6
Cost of paying for disability care while at work
2.4
2.0
Other
27.3
23.5
No difficulties expected
2.4
0.0
Number of observations
165
51

Notes: Excludes those aged 65 years or older. Of the 84 carers who indicated that there was an "other" barrier to employment, 27 (32.1%) indicated that their own health was a factor.
Source: FCPDS 2006

Caring and living in jobless households

The financial impact of not being employed depends, in part, upon the employment participation of other members of the household. This section presents information on the extent to which carers live in jobless households or households in which other adults are employed.

Almost one-quarter (23.8%) of female carers who receive only Carer Allowance live in a household in which no adult is employed. In comparison, more than twice the proportion of female carers receiving Carer Payment live in households in which no adult is employed (50.4%).

It is important to distinguish between households in which the carer is the only able-bodied working-age adult in the household and those in which there are other able-bodied working-age adults.98

If the analysis is restricted to households in which the carer is the only able-bodied working-age adult, the proportion in jobless households is much higher; over half (59.1%) of female carers who receive only Carer Allowance and 72.5% of those receiving Carer Payment live in a jobless household (see Table 11.7). In contrast, for female carers living in a household with other able-bodied working-age adults, just 8.5% of those receiving only Carer Allowance and 25.8% of those receiving Carer Payment are in a jobless household. The proportion of females living in households with at least one other able-bodied adult and in which two or more adults are employed is much higher for those receiving only Carer Allowance (50.8%) than those who receive Carer Payment (24.2%).

Table 11.7 Proportion of female carers living in households in which no adult is employed, by type of payment
  Payment type
Carer Allowance only (%) Carer Payment (%)
Carer is only able-bodied working age adult in the household
No adult employed
59.1
72.5
Number of observations
137
69
Household contains more than one able-bodied adult of working age
No adult employed
8.5
25.8
Carer not employed and at least one other adult employed
40.7
50
Carer employed and at least one other adult employed
50.8
24.2
Number of observations
317
62

Notes: The labour force status of the person being cared for was not asked in the survey. This means that the estimates in this table may overstate the extent to which carers are living in jobless households. However, any overstatement is likely to be small, given that the level of care required in order for the carer to qualify for Carer Allowance or Carer Payment is likely to preclude the care recipient from being able to work. Excludes those aged 65 years or older.

Concluding comments

This chapter has provided an overview of the labour force status and selected labour market issues for female carers who received an Australian Government payment directed towards carers (Carer Allowance and/or Carer Payment).

In relation to labour force status, there were a number of key findings:

  • Consistent with the findings of other research, carers receiving Carer Allowance or Carer Payment had relatively low rates of employment and labour force participation.
  • Employed carers were relatively more likely to be employed part-time.
  • Those receiving Carer Payment had a lower employment rate than those receiving only Carer Allowance.
  • Many carers who were not in the labour force wanted to work, particularly those receiving only Carer Allowance. Almost one-third of carers were marginally attached to the labour force (that is, they wanted to work but were not actively looking for work).
  • A substantial proportion of carers had not worked since starting caring (39.7% of those receiving only Carer Allowance and 57.4% of those receiving Carer Payment).
  • Almost half of the carers of working age at the time of the interview were not employed at the time of the interview. There was little difference in employment rates prior to commencing caring between those receiving only Carer Allowance (45.4%) and those receiving Carer Payment (47.4%).
  • Of female carers who were not employed at the time of the interview, but who had been employed just prior to commencing caring, a very high proportion said that providing care was the main reason for leaving that job (83.0% of those receiving only Carer Allowance and 78.3% of those receiving Carer Payment).
  • Many carers who were employed at the time of the interview had to temporarily give up work to provide care for the person with a disability since they starting caring, particularly those receiving Carer Payment (58.8%).
  • The majority of employed carers had changed jobs or their working arrangements in order to provide care for the person with a disability.
  • Where carers had another adult living in the household who was of working age and who did not have a disability, it was more likely that someone in the household was employed than where the carer was the only working-age adult without a disability.
  • The data illustrated the very substantial impact that caring had on carers' participation in the labour market and, if employed, their patterns of work hours and the types of jobs in which they were employed.

The data described in this chapter provides direct evidence on the changes in labour force status of carers since starting caring. It is clear that many carers had stopped working since commencing caring (either temporarily or permanently) and, when asked why, a large majority said that it was because of their caring responsibilities. Interestingly, at least among non-employed carers, there was little difference in the employment rates prior to commencing caring between those who received only Carer Allowance and those who received Carer Payment.

The fact that a large number of non-employed carers of working age expressed a desire to be in paid employment suggests that policies that support carers who want to be in paid employment may be worthwhile. This is particularly important given that many carers, particularly those of working age, will not remain carers all their life. Caring status can change for a number or reasons, including the death of the person being cared for, the requirement for institutional care, partial or full recovery of the person requiring care, and a change of primary carer. There is strong evidence that long periods out of the labour force can make it difficult to re-enter the labour market. It is therefore important for their long-term economic outcomes that carers who want to work and whose caring responsibilities do allow participation in the labour market are assisted in achieving this.

Footnotes

83. Estimates based on data from the ABS 2003 Survey of Disability, Ageing and Carers.

84. Bittman et al. (2007) used data from the first 4 waves of the HILDA survey. Lee and Gramotnev (2007) used data from the Australian Longitudinal Study on Women's Health.

85. For example, NATSEM (2004) projected that the number of older Australians needing assistance because of severe or profound disability would rise by 160% between 2001 and 2031.

86. The foregone earnings costs of providing care would be minimised if the family member with the lowest labour market earning potential takes on the primary caring role. The empirical evidence on this question is mixed. Pavalko and Artis (1997) and Spiess and Schneider (2002), using longitudinal data from the US and the European Community respectively, found that the decision as to who in the family provides care was not related to pre-care employment status. Dautzenberg et. al. (2000), using Dutch data, found the reverse result.

87. There are relatively few studies that have used longitudinal data to analyse the effects of caring on labour force participation. Henz (2004), in a study based on longitudinal data from the United Kingdom, found that providing informal care is associated with movements out of employment and with a reduction in working hours for those who remained employed.

88. There were 116 male carers of working age and 109 male carers of non-working age (over 64 years of age or had indicated they were retired). Forty-seven male carers of working age received Carer Allowance only, while 69 male carers of working age received Carer Payment.

89. Included paid and unpaid overtime. If working hours were irregular, respondents were asked to average the last four weeks.

90. The definition of unemployment we used differs from the standard ABS definition in several ways. The most important difference is that the definition of unemployment used in this report does not have the requirements that the job seeker is available to start work.

91. The definition of marginal attachment differs from the standard ABS definition in the following ways. The ABS definition includes as marginally attached those who are not employed, are actively looking for work and want to work but are not available to start work within four weeks (and are hence not classified as being unemployed). In this paper, we included as being marginally attached those who were not employed, wanted to work, were not actively looking for work and were not available to start work. The ABS would classify this group as being not in the labour force (NILF).

92. A number of carers (81) aged 64 years or younger who said that they were not working at the time of the interview because they were retired were excluded.

93. Bittman et al. (2007), using HILDA data, found that between 10% and 15% of carers with intensive caring responsibility were marginally attached to the labour force. This is much lower than the rate estimated from the FCPD survey. Possible explanations for this include differences in the definition of caring and Bittman et al.'s (2007) estimates are for male and female carers combined and for different time periods.

94. For carers who are providing care to more than one disabled adult or child the question refers to the person they had been caring for the longest.

95. Of course, it is possible that a carer who was employed at the time of the interview may have had to withdraw from the labour force for a period. The FCPDS did ask employed carers whether they had stopped work at any stage because of their caring responsibilities and these data are described in this section under "Employed carers", in Table 11.5.

96. Several response options were provided to respondents, which are detailed in Table 11.6.

97. Responses to this type of question can generate answers that are heavily influenced by social desirability, or what the interviewee thinks the interviewer wants or expects to hear.

98. An able-bodied working-age adult refers to a person with no disability who is aged 18 to 64 years.