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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.