Informal Caregivers and Life Satisfaction: Empirical Evidence from the Netherlands

Abstract

The evidence base on the causal relation between informal care and susbjective well-being is scarce and often methodologically limited. Most research to date, using simple cross-sectional estimations or fixed-effect models, fails to consider reverse causality and unobserved heterogeneity and, thus provides biased estimates. Using panel data from the Longitudinal Internet Studies for the Social Sciences for the Netherlands over the period 2009–2018, this paper investigates the causal relationship between the informal care provision and caregivers’ life satisfaction and compares Ordinary Least Square (OLS) with Arellano-Bond system Generalized-Method-of-Moments estimates. When controlling for endogeneity biases, namely unobserved heterogeneity, reverse causality and dynamic endogeneity, the caregiving effect increases by almost 300%, highlighting that OLS with fixed-effects produces a downward biased estimation. Overall, providing care has a negative effect on life satisfaction with female caregivers being the most impacted, especially when providing housekeeping and personal support to their partners.