Caregiving Costs Americans $522 Billion Annually

The price tag for informal caregiving of elderly people by friends and family in the United States amounts to $522 billion annually, a new study finds.

The new RAND Corporation study, published online by the journal Health Services Research, improves on earlier estimates about the value of informal caregiving. RAND is a nonprofit research organization.

“Our findings provide a new and better estimate of the monetary value of the care that millions of relatives and friends provide to the nation’s elderly,” said Amalavoyal V. Chari, the study’s lead author, in a written statement. “These numbers are huge and help put the enormity of this largely silent and unseen workforce into perspective.”


Across America, people spend an estimated 30 billion hours every year providing care to elderly relatives and friends. The cost is measured by valuing the times caregivers have given up in order to be able to provide care.

Researchers calculated hourly wages for working caregivers by dividing weekly wages by weekly hours worked, and for non-workers by estimating wages based on characteristics such as education, age and gender.

Three out of five caregivers also are in the labor force. Working-age people under the age of 65 provide 22 billion of those 30 billion caregiving hours, and they often lose income due to reduced work hours. Because their hourly wages are higher than those over 65, they account for the largest portion of the informal costs of caregiving, or $412 billion a year — about midway between the replacement cost of paid unskilled caregiving ($221 billion) and paid skilled caregiving ($642 billion).


“Our findings explain the interest in workplace flexibility policies being considered by a number of states that provide paid time off from work for caregivers, as well as programs such as Medicaid’s Cash and Counseling program that allows family caregivers to be paid for their assistance,” said Dr. Ateev Mehrotra, co-author of the study.

The study was supported in part by a grant from the California Health Care Foundation.

Other authors of the study are John Engberg of RAND and Kristin N. Ray of the University of Pittsburgh School of Medicine.

Access the study here.

Written by Cassandra Dowell

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