US Informal Eldercare Tops Half-Trillion Dollars

A new study shows informal care for the elderly costs the US economy more than half a trillion dollars each year.

The study, conducted by the Rand Corp., was published last month in the journal Health Services Research. It uses data from the 2011 and 2012 American Time Use surveys.

The American Time Use Survey was launched in 2011 by the US Bureau of Labor Statistics (BLS). It asks respondents about the amount of time they spent helping elderly relatives, as well as questions about the respondents’ employment status. Researchers used the employment data in the American Time Use surveys to calculate the weekly wages of respondents. Demographic information was used to calculate the hourly costs to non-workers.

Because the survey is so new, the Rand study is believed to be one of the most accurate, up-to-date accounts of the cost of informal eldercare.

“Our findings provide a new and better estimate of the monetary value of the care that millions of relatives and friends provide to the nation’s elderly,” said Amalavoyal V. Chari, PhD, the study’s lead author. “These numbers are huge and help put the enormity of this largely silent and unseen workforce into perspective.”

Three out of five informal caregivers were employed, thus they may have lost work time to provide care. The vast majority of caregiving hours — 22 billion out of 30 billion – were given by people under the age of 65. The hours given by those working-age adults account for $412 billion of the total cost to the economy. The study notes that’s nearly double the cost of replacing those informal caregivers with unskilled caregivers ($212 billion). It’s somewhat less than the cost of replacing those caregivers with skilled caregivers ($642 billion).

Rand said other studies suggest about $211 billion is spent annually on formal long-term services for the elderly.

“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,” said Ateev Mehrotra, MD, MPH, a co-author of the study.

The study was funded in part by the California Health Care Foundation.