Grandparent Care: A Key Factor in Mothers' Labour Force Participation in the UK

Abstract

The relationships between paid work and informal care are critical to understanding how paid work is made possible. An extensive source of childcare in the UK is the intergenerational care grandparents provide. Using data from the UK's Millennium Cohort Study, a nationally representative sample of children born in 2000, biprobit and instrumental variables (IV) analysis of mothers’ participation (given the social construction of caring responsibility) identifies a significant causal effect of grandparents’ childcare in that it:

(i) raises the labour force participation of mothers with a child of school entry age on average by 12 percentage points (the average marginal effect);

(ii) raises the participation of the group of mothers who use grandparent childcare by 33 percentage points compared to the situation if they did not have access to this care (the average treatment effect on the treated).

Thus grandparent-provided childcare has a substantial impact on the labour market in the UK, an impact that may not be sustainable with forthcoming changes to the state pension age. Grandparents’ childcare increases the labour force participation of lone and partnered mothers at all levels of educational qualifications but by different degrees. Grandparents’ childcare enables mothers to enter paid work rather than extending their hours of paid work.