Unpaid Carers support family, friends and neighbours with challenges related to disabilities, long-term illnesses, or older-age. However, the support that they provide often comes at a significant financial cost to them.
A study conducted by the Centre for Care team members based at the University of Sheffield and the Leverhulme Centre for Demographic Science, breaks new ground in our understanding of the “caring income penalty” – quantifying how unpaid care impacts people’s income. Our researchers used an innovative Individual Synthetic Control method to compare unpaid carers’ income trajectories with synthetic counterparts who shared similar characteristics but did not provide care. They found that unpaid carers who provided 50+ hours of care per week saw their personal income fall on average by £162 per month, with losses peaking at £192 per month after four years.
The financial impact was not the same for everyone. For example, younger unpaid carers under 25 years old faced the steepest penalty, losing up to £502 each month. Women providing 50 hours or more of unpaid care per week experienced a 30% drop in their earnings compared to a 25% drop for men. The results also varied by ethnic group, where unpaid carers from ethnic minority groups experienced a lower absolute income penalty compared to white unpaid careers.
Intensity of hours
The intensity of hours of caring also impacted upon finances differently. Unpaid carers who provide the lowest intensity of care (less than five hours per week) experienced an income penalty, with an average monthly penalty of £44. Unpaid carers who provided 20–49 hours per week faced an income loss of up to £153 per month. Unpaid carers who provided 5–19 hours of care per week saw reductions of up to £138.
These financial penalties have far-reaching impacts on households, particularly in households with the highest number of hours of care. Households with a member providing 50 or more hours of unpaid care per week experienced a significant 12% decrease in total household earnings. This drop translates to hundreds of pounds per month, exacerbating financial strain and limiting resources for essential expenses.
Need for more effective support
The study’s findings underscore the pressing need to develop more effective support systems for unpaid carers and the people they support. For example, the provision of flexible work policies, financial support, and affordable formal care may be instrumental in alleviating the impact on unpaid carers’ income. As the demand for unpaid care rises with demographic shifts, acknowledging and addressing these challenges will be vital to supporting unpaid carers.
Read the paper here: https://arxiv.org/abs/2411.10314.