Giving Compass' Take:

• Dyvonne Body explains that rising dependent care costs are burdening families - particularly women - to an unmanageable extent. 

• How can funders work to address this nation-wide problem? 

• Read about policy shifts to reduce inequalities in care work. 

The costs borne by a caregiver, whether they be a family member or a professional care provider, are frequently overlooked. The workday extends well past 5 PM for those caring for children, elders, or adults with disabilities. The proportion of adults providing personal care or financial assistance to a parent has more than tripled in 15 years to over 20%. Furthermore, costs for facility and in-home care services have risen on average by 1.5% – 3.8% per year, with families having to pay more out-of-pocket. Unreliable or expensive childcare is also a large obstacle for many families. Childcare costs rose more than 70% between 1985 and 2011 and have continued to increase for working families. When taken together, each of these factors contributes greatly to unplanned absenteeism and disruptions to workforce productivity, in addition to impacting household budgets.

Millions of people, including children, adults, and elders, require long-term services and supports (LTSS) for disabling conditions and chronic illnesses. While LTSS is often associated with older adults, around 40% of those needing it today are under the age of 65. Services are extensive and can include assistance with activities of daily living, programs for the specific needs of children, nursing facilities or adult daycares, and even supported employment for working adults with disabilities. However, LTSS expenses are growing, with some costs exceeding $90,000 annually. Few families and individuals can afford to pay out-of-pocket and often rely on government programs like Medicare or Medicaid to help cover costs. For working people, the high cost of LTSS can impact the ability to earn income, accumulate assets, and save for the future.

Economic costs related to caregiving tend to be greater for women. It is estimated that 6 in 10 informal caregivers and 9 in 10 professional caregivers are women. A study by AARP finds that women spend twice as much time providing care than men and are more likely to leave the labor force early due to caregiving responsibilities. The total amount of lost wages for women who leave the workforce is 60% greater than that of men, with individual losses equaling $142,693 for women and $89,107 for men.  Women greatly outnumber men in caregiving occupations, such as health care and care support (87.7% female) and early childhood care and education (93.5% female).

Women of color are increasingly overrepresented in these low-wage occupations and are disproportionally exposed to the financial insecurity associated with the profession. Further, Latina (21.0%) and African American (20.3%) women provide informal caregiving at higher rates than white women (16.9%).

Shifting work and family dynamics, without the proper public policies to match, will worsen the financial security of millions of households. Medical advances are allowing adults to live longer, including those living with a disability or a chronic disease. The average birth rate is declining annually and women’s labor force participation and earnings play a greater role in family incomes than ever before. The share of families of color is expected to double, emphasizing the importance of income and wealth equality for future household stability. Due to these trends, there is evidence that dependent care costs will pose increasingly hefty financial burdens on families and individuals with care needs.

Read the full article about rising dependent care costs by Dyvonne Body at The Aspen Institute.