European Network of Economic Policy Research Institutes (ENEPRI) Research Report No. 13, 34 pages
This paper uses the European Community Household Panel (ECHP) to analyse the relationship between the dynamics of labour force participation and informal care to the elderly for a sample of women aged 20-59 across 13 European countries. The analysis has two focal points: the relative contributions of state dependence as well as observed and unobserved heterogeneity in explaining the dynamics in women’s labour force participation and the existence and consequences of non-random attrition from the ECHP. The results indicate positive state dependence in labour force participation in all 13 EU countries used in the analysis. The share of unobserved heterogeneity accounts for between 45% and 86% of the total variation in labour force participation. Informal care-giving is found to have a significant, negative impact on the probability of employment only in Germany. Nevertheless, analysis of different sub-groups indicates that the impact is largest for middle-aged women and also for single women in several EU countries.