How the caregiver penalty exacerbates the gender wage gap

How the caregiver penalty exacerbates the gender wage gap

What you probably already know: The so-called “caregiver penalty” is holding back millions of people across the U.S. who struggle to work their jobs and then care for aging family members as well. AARP and National Alliance for Caregiving estimates 29 million workers are working while caring for older family members, and 60% are working full time. The burden of this kind of caregiving often falls on women, which exacerbates the existing gender pay gap in the U.S.

Why? Other countries including many Asian countries support to those who are caring for older family members, but many countries including the U.S. have very little in the way of support in place. The U.S. spends about $22,356 per person on older adults. Chile spends 0.02% of its GDP on long-term care, according to a recent study by Brown University’s Emilia Brito and Dante Contreras. The study found the caregiver penalty increases the gender wage gap by 9%, which is already significant: women make 83.6% of what men make.

What it means: Some U.S. companies already have benefits available to employees in countries where the social norms include caring for aging parents. Starbucks, for example, includes elder parental care benefits for all its Chinese employees. The rapidly aging population and slowing birth rate will make elder care an even more significant issue in the next few decades.

What happens now? More than 75% of caregivers are women. The Brown University study found that daughters experience a 4% decline in earnings in the five years after a parent becomes ill, where sons experience a 1.5% increase in earnings. To close the gender pay gap, governments and employers will need to address this issue head-on.

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