Scandinavian Working Papers in Economics

HERO Online Working Paper Series,
University of Oslo, Health Economics Research Programme

No 2008:8: Informal Care and Labor Supply

Elisabeth Fevang , Snorre Kvrendokk and Knut Røed ()
Additional contact information
Elisabeth Fevang: Ragnar Frisch Centre for Economic Research, Postal: Gaustadalléen 21, 0349 Oslo, Norway
Snorre Kvrendokk: Ragnar Frisch Centre for Economic Research, Postal: Gaustadalléen 21, 0349 Oslo, Norway
Knut Røed: Ragnar Frisch Centre for Economic Research, Postal: Gaustadalléen 21, 0349 Oslo, Norway

Abstract: Based on Norwegian register data we show that having a lone parent in the terminal phase of life significantly affects the offspring’s labor market activity. The employment propen-sity declines by around 1 percentage point among sons and 2 percentage points among daughters during the years just prior to the parent’s death, ceteris paribus. Long-term sickness absence increases sharply. The probability of being a long-term social security claimant (defined as being a claimant for at least three months during a year) rises with as much as 4 percentage points for sons and 2 percentage points for daughters. After the par-ent’s demise, earnings tend to rise for those still in employment while the employment propensity continues to decline. The higher rate of social security dependency persists for several years.

Keywords: Elderly care; labor supply; ageing; inheritance

JEL-codes: J14; J22

39 pages, June 2, 2009

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