As the baby boom cohort nears retirement age, the question
of how to provide necessary health care and personal services
to a growing elderly population has become a looming policy
problem. Beginning in 2020, the number of Americans over the
age of 65 will surpass the number of primary providers of
formal and informal long-term care (women between the ages
of 20 and 44). Perceptions of shortage and very high turnover
in todays direct care labor market are compounding the
This paper provides an overview of the labor market for direct care workers in the United States, including comprehensive empirical analyses of wage determination and labor supply, using panel data from the 1996 and 2001 Surveys of Income and Program Participation (SIPP). The paper describes the ways in which public policy is expected to affect the direct care labor market and empirically analyzes the wages, health insurance coverage, and employment duration of direct care workers. The authors find both that wages of direct care workers are quite low, with median starting wage of $7.96, and that spells of employment with a given employer are short, averaging just under 10 months.
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