Thanks, grandma!

Jeff Madrick rightly dubbed cutting Social Security and raising the Medicare eligibility age two of the 10 worst economic ideas of 2011. Nevertheless, the idea that we need to work into our late 60s or even 70s has become an obsession of many inside the Beltway, who prefer to close Social Security’s modest projected shortfall on the cost side rather than the revenue side. Likewise, self-styled budget hawks are more concerned with reducing government spending on health care than addressing inefficiencies in the overall system, which are worse in the private sector.

Among other problems, an obsession with working longer ignores the fact that women, at least, are working more at younger ages. Not only does this help Social Security’s finances, but it turns out that forcing seniors to keep working into old age might actually reduce the number of younger women who are able to work (this assumes there are jobs for everyone). A new working paper by economists Janice Compton and Robert A. Pollak finds that proximity to grandmothers increases mothers’ employment, presumably because grandparents are able to help with childcare. (Though the study only directly measures the impact on women who live near their mothers and mothers-in-law, it also indirectly captures some of the effect of doting grandfathers and other relatives.) Though the study doesn’t take into account whether the grandmothers are working or retired, retirees have more time to spend on care-giving, which can oftentimes allow their children the flexibility to return to, or remain in, the workplace.

This study resonated with me because, like a lot of new parents, my ability to return to work this year depended not only on a paid caregiver, but also on grandparents. My husband and I were lucky to have both a friend looking for a flexible job and parents living nearby who offered to pitch in one day a week and as needed. Not only is my daughter blossoming under her grandparents’ and my friend’s care, but my parents’ help indirectly boosted the economy by allowing both my friend and me to return to work. (Admittedly, in some cases grandparent care may reduce the paid workforce, and GDP, to the extent that it simply replaces paid care-giving with unpaid care-giving, but as feminist economists like to point out, GDP is not a good measure of social welfare.)


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