This is the second blog in a series detailing the panels and discussions that took place at the recent 2024 Care Conference hosted by the Institute for Women’s Policy Research (IWPR) and American University’s Program on Gender Analysis in Economics (PGAE).
Why is women’s retirement income substantially lower than men’s? Why does Medicaid fail to meet the care needs of so many Americans? How can government interventions help reduce the pressing care needs of an aging population? And how can caregivers be financially supported? This year’s Care Conference aimed to answer these questions by bringing together researchers, academics, advocates, and policymakers to discuss new research and policy interventions to address the growing need for care in the United States.
The increase in the aging population has brought significant challenges for society and the economy. Many older adults—particularly women—have insufficient retirement income, many caregivers lack financial security, and the rising care needs of older adults are not being adequately met. These issues and policy initiatives to address them were the subject of a workshop titled “Challenges of an Aging Population: Retirement Gaps and Elder Care.”
Siavash Radpour, an assistant professor of economics at Stockton University’s School of Social and Behavioral Sciences, kicked off the workshop with shocking findings based on joint research with IWPR’s Martha Susana Jaimes. As if the gender gap in earnings was not bad enough, the gender gap in retirement income for Americans 65 and older is even more pronounced. In turn, poverty rates among older women are comparatively high: 10.5 percent of women live in poverty, compared to 7.4 percent of men, and 20.2 percent of women live near the poverty line, compared to 14.9 percent of men. The facts are clear: Because caregiving activities predominantly fall on women, they often reduce their work hours or leave the workforce, having a negative effect on their earnings. Lower lifetime earnings not only impact retirement income but also restrict the ability to save. Though women are more likely than men to have savings, those of men tend to be much higher, contributing to the gender gap in retirement savings.
Unmet needs for eldercare are another challenge, as David Knapp, a research scientist and labor economist at the Center for Economic and Social Research (CESR) at the University of Southern California, explained. He pointed out that Medicaid applies tight eligibility criteria, leaving many Americans whose care needs are considered ‘insufficient’ behind. In those circumstances, care is often performed by family members, especially in families with limited financial means. Those who have lower levels of need often receive no care at all. Half of all women who need assistance with one ADL (activity of daily living) receive no care at all, and this proportion is 20 percentage points higher for women who have no family nearby.
Sung Ah (Sue) Bahk, an assistant professor of economics at American University, reported on a promising government intervention. In response to increasing eldercare needs, the South Korean government took an innovative approach and implemented a Long-Term Care Insurance (LTCI) system in 2008. The LTCI is universal, meaning that all individuals aged 65 and older are eligible. Benefits include at-home and institutional care services, as well as cash benefits in exceptional circumstances. According to Bahk’s and her colleagues’ research, this reform had two remarkable effects. First, the LTCI led to a significant decrease in women’s unpaid at-home care activity. Second, women’s labor force participation rates increased rapidly following the implementation of the LTCI. Evidently, South Korea’s reform is a prime example of successful restructuring of care work and employment, with large and positive outcomes on women’s economic opportunities.
Joel Eskovitz, director of social security and savings at the AARP Public Policy Institute, concluded the workshop by discussing legislative efforts to address the elder care crisis. He shared AARP research that finds 48 million Americans provide unpaid care annually and spend 26 percent of their income on out-of-pocket caregiving expenses. Not surprisingly, these enormous caregiving costs put many families at risk of financial insecurity. The Lowering Costs for Caregivers Act and the Credit for Caring Act are bills that would offer tremendous financial relief to caregivers across the country. Additionally, AARP supports extensions to the Family and Medical Leave Act to ensure the law applies to all primary caregivers.
Moderator Monique Morrisey, a senior economist at the Economic Policy Institute, left the audience with the following fact: AARP estimated that the cost of unpaid care to caregivers amounts to $600 billion a year. This rather conservative estimate values unpaid care at $17 an hour. The Biden-Harris Administration proposed a $400 billion plan for home- and community-based care services that would have helped millions of Americans. The plan failed in Congress as it was deemed ‘too ambitious,’ even though it would not have even covered the investments necessary to meet all care needs. If anything, it will require more ambition to address the growing eldercare crisis in the United States.
Hannah Gartner is a research associate at IWPR.
Watch the full workshop here and download the presentations here.
