Grandchildren and work: labour supply responses in later life

Abstract As populations age, many people become grandparents before retiring, complicating later-life labour supply. Using nationally representative Australian data and an instrumental variable strategy, we estimate the causal effect of grandparenthood on work. Grandparenthood reduces grandmothers’ participation in the labour force driven by the extensive margin adjustments, while grandfathers’ labour supply is largely unchanged. Subgroup estimates suggest possible education and attitude gradients, but do not establish differences between groups; estimates across area disadvantage are similar in magnitude. These results highlight the relevance of intergenerational family responsibilities for later-life employment, while the mechanisms and distribution of effects across groups remain uncertain.