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'Informal Care' for Older Americans Tops $500B Annually

Working adults caring for elderly relatives and friends are losing income, researchers report

FRIDAY, Oct. 31, 2014 (HealthDay News) -- Each year, people across the United States spend an estimated 30 billion hours caring for older relatives and friends, which costs $522 billion, according to a RAND Corporation study published online Oct. 7 in Health Services Research.

To get a better sense of the value of informal care, the researchers analyzed data from the 2011 and 2012 American Time Use Survey conducted by the U.S. Bureau of Labor Statistics. Participants of this survey were asked about their job status, as well as how much time they spent helping older relatives with their daily activities. The researchers also calculated participants' hourly pay based on their hours worked and weekly wages as well as their education, age, and gender.

The researchers found that three out of five caregivers have jobs. People younger than 65 provide 22 billion out of 30 billion hours of caregiving. This accounts for the largest portion of informal care costs, or $412 billion per year, the researchers said. To provide care, however, working adults often cut back on their hours and lose income, they noted. Replacing the informal care provided by friends and relatives with unskilled workers would reduce the cost of informal care to $221 billion per year. On the other hand, if skilled nurses provided this care, the cost would jump to $642 billion annually.

"Our findings explain the interest in workplace flexibility policies being considered by a number of states that provide paid time off from work for caregivers, as well as programs such as Medicaid's Cash and Counseling program that allows family caregivers to be paid for their assistance," study author Ateev Mehrotra, M.D., a researcher at RAND Corporation and an associate professor at the Harvard Medical School, said in a RAND news release.

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