Ageing and the Family in Indonesia: An Exploration of the Effect of Elderly Care-Giving on Female Labor Supply

In developing countries, the absence of universal social safety nets frequently necessitates co-residence between older parents and adult children for the provision of elderly care. In this article we use the 2000 Indonesian Family Life Survey (IFLS 3) to distinguish between co-residence with and care-giving for the elderly and examine the impact of care-giving for elderly household members on the labor supply decisions of co-resident working-age adults. After controlling for the potential endogeneity of co-residing decisions and the selection bias arising from such endogeneity, our results suggest that care-giving reduces the margins of labor supply, both the intensive (working hours) and extensive (participation) margins. This effect is particularly strong in samples of female adults.