Health of Parents, Their Children's Labor Supply, and the Role of Migrant Care Workers

We estimate the impact of parental health on adult children’s labor market out-comes. We focus on health shocks that increase care dependency abruptly. Ourestimation strategy exploits the variation in the timing of shocks across treatedfamilies. Empirical results based on administrative data show a significant negativeimpact on the labor market activities of children. This effect is more pronouncedfor daughters and for children who live close to their parents. Informal caregiving isthe most likely mechanism. The effect is significantly muted after a liberalization ofthe formal care market, which sharply increased the supply of foreign care workers.