Unmet needs in formal care: kindling the spark for caregiving behavior

This paper studies if a situation of formal care unmet needs is a strong motivation for the onset of caregiving behavior, and if becoming caregiving is a compelling argument for leaving current job (in the presence/absence of formal care unmet needs). We use data from the Eurobarometer 67.3 for 18 European countries and estimate a three simultaneous equations model taking into account the potential endogeneity of labor participation and formal care unmet needs and assuming non-zero correlation among the error terms of the three equations. Results show that individuals who anticipate that becoming caregiver can suppose an obstacle for continuing working feel more refractory and are more prone to avoid caregiving responsibilities. Knowing someone with an unmet needs problem increases the probability of becoming caregiver by +19.23 pp (with a maximum of +39.39 pp for difficult access unmet needs) and raises the probability of leaving employment by 5.77 pp. Having to possibility of receiving economic benefits for caregivers encourage more labor market exit as compared to payment of social security contributions during care leaves.