The United States is one of only a few Organization for Economic Cooperation and Development (OECD) countries without federal universal long-term care insurance1 or federal paid family and medical leave.2 While this is an issue for nearly everyone, it is particularly problematic for women, who are the most likely to provide both unpaid and paid elder care. When workers are paid for caregiving—nearly 90 percent of the U.S. direct care workforce are women3—they often receive low wages and lack access to benefits. When women provide informal or unpaid elder care, their employment opportunities, labor force participation, and wages are often negatively affected by their commonly assumed role as primary caregivers within their families.
The absence of federal programs or public funding for elder care, as well as the cost of public and private options, increasingly leaves women responsible for caring for their older family members,4 in addition to their predominant role in providing child care and other family care. With the population aging, increasingly more women are stepping in and caring for not just older family members but also nonrelatives and chosen family members.5 Due to a variety of societal changes and evolving family structures over the past several decades, caring for a nonrelative is more common than caring for a parent, parent-in-law, or spouse.6 About 25 percent of unpaid caregivers report taking care of a nonfamily member, while 22 percent and 15 percent report caring for a parent or spouse, respectively.7
Elder caregiving should be an issue of the utmost importance for policymakers who want to ensure U.S. economic growth is strong and inclusive and thus well prepared for the future as the nation’s population ages. Savvy policymakers should view elder caregiving as an important issue for long-term economic stability. Public investments in elder care would help allow more women to enter or stay in the labor force, which translates into stronger economic growth. In addition, better pay for workers in the female-dominated direct care workforce means more economic stability for these workers and their families.
Policymakers also should recognize that the segment of the U.S. population that is most likely to be providing or receiving elder care now and into the future is the largest voting bloc. People older than age 50 typically represent more than half of the U.S. voting population, and even more in midterm elections.8 They also represent the lion’s share of elder caregivers and receivers of elder care, particularly women, who are expected to make up 55 percent of the population aged 65 and older, whereas men will represent 45 percent by 2035.9 Policymakers should only expect these shares to grow as the demographic composition of the population ages.
Federal and state policymakers can enact an array of elder care reforms that enable more women to enter and remain in the workforce, contributing to overall U.S. economic growth and stability. This chapter of the “Playbook for the Advancement of Women in the Economy” details the problems women face in providing unpaid and paid elder care, the economic benefits of resolving them, and specific policy solutions for doing so.
The problem
In the 2020 U.S. decennial census, 96.8 million noninstitutionalized people, or 29.8 percent of the population, were older than age 55, with 16.8 percent older than 65.10 These data do not capture the institutionalized population, or those living in group quarters such as nursing homes, which are home to an additional 1.6 million people, the vast majority of whom are more than 65 years old.11 While a relatively small overall share of older adults live in institutional settings, between 2010 and 2020, that population increased by 8.3 percent.12
Regardless of whether elder care is provided in formal paid or informal unpaid settings, elder caregiving will be an increasingly important issue in the coming decades as the U.S. population continues to age. And if patterns of care remain the same, the responsibility for that care will continue to overwhelmingly fall upon women.
Care preferences and cultural norms
Research from the AARP indicates that 77 percent of adults aged 50 and older want to stay in their homes as they grow older.13 While formal care options may be desirable for many families, some cultures and demographic groups prefer familial elder care.14 Among Asian Americans, Hispanic Americans, and African Americans, for example, research shows that providing care for one’s family is embedded in life experiences and perceived responsibilities; elder care is something that is often done without question.15
At the same time, economic factors play a large role in families’ abilities to care for older adults, especially formal caregiving. Many older low-income adults and adults of color do not have the savings they need to afford formal caregiving options due to the nation’s racial wealth gap16 and income gap.17 The intersection of race and gender wage gaps can result in losses of nearly $900,000 to upward of $1 million over a working lifetime for Black women and Latinas, respectively—and potentially more in lost investments that contribute to net worth.18
Formal and paid caregivers
Formal caregiving can encompass a wide range of professionals from different educational backgrounds that require various certifications depending on the state and type of care provided.19 These occupations are dominated by women, who represented 87.4 percent of registered nurses in 202020 and 87 percent of direct care workers in 2019.21 Women of color22 and immigrant women (see Chapter 10) also were disproportionately employed in these occupations in 2019.
These direct care workers, as defined by the U.S. Department of Labor’s Bureau of Labor Statistics, are “paraprofessional workers [who] hold a variety of job titles, including personal care assistant, home care aide, home health aide, and certified nursing assistant.”23 Older people prefer in-home care options that allow them to stay in their homes as they age;24 state-level policies could improve pay for jobs that support this in-home care while making this care more accessible to low-income people who need it.25
The Bureau of Labor Statistics projects that in-home health care support occupations will be among the fastest-growing occupations in the next decade, and the expected growth of other formal direct care occupations also is high.26 For years, however, these occupations have experienced labor shortages and workforce pipeline issues that were only exacerbated by the COVID-19 pandemic.27
What’s more, the elder care workforce itself is aging. About 32 percent of workers in the home health care services industry are 55 years of age or older, compared with nearly 24 percent of all employed workers.28 State programs, such as the ones that provided hazard pay to temporarily boosted home care wages as part of the American Rescue Plan Act of 2021, increased the likelihood of workers staying in the profession, but permanent long-term funding is needed.29
Despite high demand, the wages of these essential workers are very low, which is why elder care workers cannot afford to lose strides in union organizing that were made during the pandemic.30
Informal and unpaid caregivers
According to Bureau of Labor Statistics’ American Time Use Survey data, from 2021 to 2022, women represented 59 percent of unpaid elder caregivers on average.31 Women also are more likely to care for multiple adults at a time.32 And they are more likely than men to be the primary caregivers overall in families33—and primary caregivers tend to provide more hours of care.34 According to a recent study that examined elder caregiving among women ages 50 and older, women from socioeconomically disadvantaged backgrounds tend to provide more time-intensive care.35
For most caregivers, providing elder care must be done alongside working full-time jobs. In fact, more than half (56 percent) of employed adult elder caregivers work full time.36 Caregiving does present particular risks to employment for some groups, especially women of all ages who reside with an older family member needing care.37 About 56 percent of unpaid caregivers are older than age 45, with the most common group of elder caregivers between the ages of 55 and 64 (21 percent of elder caregivers), followed by caregivers ages 45 to 54 (20 percent) and those ages 65 and over (15 percent).38
The economic benefits
Compared with men, women are greater than five times more likely to work part time, twice as likely to take time off, and 73 percent more likely to leave the labor market due to informal elder care responsibilities.39 A recent study on the caregiving effects on the U.S. labor supply finds that living with an older family member who is in need of assistance significantly reduces the number of hours women caregivers were able to work as well as their likelihood of being able to work full time.40
Familial care is an important and desired form of elder care, which is why more public support is needed than is currently offered by Medicaid home- and community-based services (HCBS) programs, which provide a variety of care supports for services that would typically be offered in an institutional setting, but in a home setting. Additional federal Medicaid HCBS funding has historically been called for to help states then reduce waitlists for services and potentially expand services, among other benefits.41 More robust federal and state funding for home care service also would enable these informal family caregivers to enter and remain in the workforce, contributing to their own and their family’s economic security and to broader U.S. economic growth.
Indeed, a relatively recent meta-analysis finds that at midlife,42 women caregivers of older parents are also significantly more likely to work fewer hours relative to their noncaregiving counterparts.43 Reductions in hours have a direct effect on wages, which is especially concerning for women of color and women with lower levels of education, who tend to provide more time-intensive care and also earn less than their white and highly educated peers, further perpetuating income disparities.44
When informal elder care ends, however, the likelihood that a part-time working woman is able to increase her hours back to full time is low.45 Women’s probability of employment declines immediately after the start of caregiving,46 and as their amount of time spent caregiving increases, the likelihood of being able to return to full-time hours drops.47
Female caregivers, however, tend to experience less severe declines in labor force participation than men and typically return to the labor force around two years after the start of their elder caregiving responsibilities, though this return is associated with a decrease in working hours.48 Interestingly, these effects may be due to different gender dynamics in caregiving responsibility; women are more likely to provide care if there is a need unrelated to her own employment, while men are more likely to weigh the opportunity cost of caregiving.49
What this indicates is that while men might be more responsive to picking up elder care duties when the labor market is down, women are likely responding to issues such as the cost of care or the quality of care rather than their own employment prospects. The long-term economic effects of caregiving can also increase caregivers’ likelihood of experiencing poverty.50
International comparisons
From an international perspective, some OECD countries have increased caregivers’ labor force participation by investing in long-term care insurance. In general, long-term care insurance encompasses a broad range of activities that do not need to be provided by a medical doctor, though the level of coverage varies greatly by country and even locality under some programs.51
In 2011, the OECD reported that a 1 percent increase in hours of long-term/elder care reduces the employment rate of caregivers by around 10 percent.52 A recent study that looks at spillover effects due to universal long-term care insurance suggests that its introduction in Japan, South Korea, and Germany allowed economically active caregivers—specifically female caregivers—to increase their labor force participation or reenter the labor force. The same study finds that policies designed to promote formal care, as opposed to informal care, can increase labor force participation.53
The policy recommendations
When it comes to elder care, federal and state government policies are leaving families—and in particular, women—to just deal with it. Families face substantial financial out-of-pocket outlays for elder care. Many of these caregivers are forced to choose between providing care for a loved one and earning a wage, while others cannot take paid time off to care for an older loved one.
What’s more, professional care providers are not currently being paid livable wages in an industry that requires a specialized skill set. To prevent the United States from ill-advisedly relying on women’s unpaid labor, policymakers at the federal and state levels must prioritize elder care.
Federal policy recommendations
Federal policymakers can take steps to improve elder care across the United States, specifically:
- Pass national comprehensive paid family and medical leave: Enacting the FAMILY Act54 (see Chapter 6) is the first key step, as it includes measures that meet the needs of diverse family relationships and supports caregiving of chosen families.55
- Invest in job quality and wages for professional caregivers:56 This step is important for direct care workers,57 who typically earn less than $17 per hour, and requires the enactment of the Raise the Wage Act and support for unions (see Chapter 9) and collective bargaining rights via the Protecting the Right to Organize (PRO) Act.
- Increase access to paid short-term leave:58 This can be done by passing the Healthy Families Act.59
- Increase federal Medicaid funding for home- and community-based services
State policy recommendations
A number of state governments have already expanded their fiscal support for more comprehensive elder care, and those states that have not could follow their lead, specifically:
- Expand Medicaid home- and community-based services:60 This step would reduce waitlists and ensure all who need access to elder care support are able to receive it. Because Medicare does not cover in-home care, state Medicaid programs also should consider the eligibility and access of older individuals to this program. Expanding access will create new jobs that will likely be filled by women, given the gendered nature of the formal elder care workforce.61
- Increase provider payment rates and wage pass-through requirements: This can be done through existing state Medicaid programs in the absence of federal policy action because states can provide higher pay for caregivers.62
- Recognize the right of Medicaid-reimbursed home care workers to bargain over wages and work conditions: State policymakers should partner with home care worker representatives to create high-quality training, benefits, and advancement opportunities.63
- Create workforce boards: State policymakers can bring together workers and their employers to set and enforce workplace standards, including wage standards, that cover all workers in the industry. Workforce boards are already in place for domestic workers, home care workers, and nursing home workers in several jurisdictions in the country, including Colorado, Michigan, Minnesota, and Nevada.64
- Implement value-based payment models and managed long-term supports and services: These reforms can be enacted through state Medicaid programs by utilizing payment and delivery reforms, such as pay-for-performance models in long-term support services, to support the direct care workforce.65
- Improve managed care delivery of long-term supports and services: State policymakers can enhance the direct care workforce by requiring a workforce innovation component in these supports and services that includes training and credentialing programs.66
- Protect and expand Medicaid coverage:67 This policy initiative is particularly important in the 10 states68 that have not yet adopted Medicaid expansion under the Affordable Care Act.69
Conclusion
With a rapidly aging population, federal and state policymakers need to invest in elder care infrastructure now in order to create the pipeline that is needed to sustain the industry for years to come. By doing so, they will help ensure women stay in the U.S. labor market and enhance their economic security, benefiting the U.S. economy as a whole.
The authors would like to thank Amina Khalique and Anona Neil for their research assistance and Mia Ives-Rublee, Rose Khattar, Molly Weston Williamson, Nicole Rapfogel, Natasha Murphy, Karla Walter, Andrea Ducas, and Lily Roberts for their thoughtful review.