Informal caregivers provide valuable services to elderly persons with long-term care needs, but the consequences of caregiving on caregivers are not yet fully understood. This paper illustrates
the interrelation between caregiving and caregivers’ labour force participation, cognitive ability, and health in a simple theoretical model, and estimates the effects of caregiving using panel data from
thirteen European countries, which allows to analyse the effect of institutions on caregivers’ outcomes.
The results show that caregiving severely and significantly reduces caregivers’ probability of being employed, but only in countries with few formal care alternatives. Furthermore, caregivers in all
countries suffer from worse mental health when caregiving is prompted by poor parental health. The results for the effects of caregiving on physical health and cognitive ability are mixed.