New research by the e61 Institute has quantified the employment and mental health impact of becoming an unpaid carer for a relative or friend.
Around 12 per cent of the working-age population, 2.5 million Australians, provide unpaid care to family members or others with disabilities, long-term health conditions, or issues related to old age. More than 5% of people in their 20s and more than 15% of people in their 50s and 60s are unpaid caregivers.
The analysis finds in the first year of becoming a caregiver, carers' hours of work decreased on average by 1.3 hours per week and their fortnightly real income decreased by $40.
Carers also suffered a 3.3 percentage point drop in their employment probabilities. Around 59.3% of future caregivers were employed in the year before they became caregivers but this dropped to 56% once they started providing care.
The analysis of the Household, Income, and Labour Dynamics in Australia (HILDA) survey also finds a decline in the mental health of carers after they take on caring duties, especially in the short-term after making the transition, and a long-lasting drop in life satisfaction.
"Together, the drop in labour market attachment, deterioration in mental health, and the time commitment associated with taking on caring duties takes its toll on carers," said Pelin Akyol, Research Manager at e61 Institute.
"This shows up in a persistent decline in reported life satisfaction, especially for those who take on main carer responsibilities.
"Our research finds a significant immediate decline in employment and hours of work when someone begins unpaid caring for someone else."
"The dampening effect on working hours and employment in the first year is similar to what would happen if the workers experienced an income tax increase of 10 percentage points.
"This impact moderates slightly over time but persists longer for main carers than partial carers.
"Overall, this research finds that informal caregiving duties can be challenging and detrimental for those who must adjust their life circumstances to meet these needs."
