Golden Years? The Labor Market Effects of Caring for Grandchildren

The number of Americans raising grandchildren has been rising steadily. In this article, we expand what is known by focusing on the economic implications of this trend. We compile a unique data set from the Panel Study of Income Dynamics along with its Parent Identification File on 3,240 nonretired grandparent household heads and estimate the effect of taking in a grandchild on labor force participation and hours worked. We estimate models that distinguish between grandparents living alone from those only with grandchildren (skipped-generation households) and those also with their own children (3-generation households). We find that caring for grandchildren increases labor force attachment, with grandfathers more likely to work and grandmothers working longer, if another adult is available to supervise the grandchildren.