Give Some, Lose Some: Why Women Caregivers Face More Financial Instability

En español | Most women, at some point in their lives, will care for a family member who has a chronic illness or condition, suffers an injury, or becomes frail as they age. And the majority of these caregivers are doing more than helping their loved ones with the activities of daily living—they’re in the workforce too, employed full- or part-time.

Due to the economic recovery in the wake of the pandemic, the broader trajectory of women in the workforce has appeared quite positive. Women’s labor force participation is surging, with employment of so-called prime-age women (those ages 25–54) back to pre-pandemic levels.

However, lurking just below the surface of this seemingly good news is a big problem at the intersection of caregiving and financial stability for women. Recent research tells a story of caregiving’s financial downsides—made more severe by the effects of deep-rooted challenges to financial stability for women as a whole—creating an endemic, underreported condition of hardship.

Long-term financial insecurity among women is not a new problem. Let’s look at the obstacles women face at different points in their life:

When a young woman gets her first job, she often earns less than her male counterparts. This gender pay gap persists and compounds over time. Overall, women earn an average of 82 cents for every dollar earned by men, and the gap is even larger for Black and Latina women (62 cents and 54 cents, respectively). To start a family, many women cut back on their work hours, forgoing promotions or other opportunities, or leaving the workforce entirely.

Financially, this decision has ripple effects. Reduced earnings again lead to lower savings. Down the road, this means lower Social Security benefits since those are based on lifetime income. If or when she decides to return to full-time in her current job or re-enter the workforce, she is now years behind her male colleagues in terms of position, earnings, and savings. It all adds up to a pernicious inversion of compounding interest—a curse of compounding losses.

Now, add caregiving into the mix. A recent AARP poll in the state of New York found that most working women caregivers have adjusted their work schedule to make more time for caring—they go into work early or late or take time off. At least one in five have taken a leave of absence from their job, reduced their work hours, or given up working altogether.

This same survey finds—and no wonder—that three in four women caregivers say they feel stressed emotionally, and one in three say they feel strained financially due to their caregiving responsibilities. Seven in ten working caregivers say they feel stressed in balancing their job and family responsibilities.

And this unique financial strain on caregivers is not limited to New York—the problem is borne out nationally. Caregivers lose an average of $237,000 in earnings over their lifetime, according to a 2023 Urban Institute study, with lost retirement income from Social Security and employment-based plans making up an estimated 20 percent of that total.

Not surprisingly, caregivers report being less prepared than non-caregivers to weather a $5,000 emergency expense. They are particularly apt to flag prescription drugs and medical expenses as financial issues that cause them stress. And yet, caregivers tend to rate their health as poorer than non-caregivers.

Ultimately, nobody bears the brunt of the financial strains associated with caregiving quite like women aged 65 and up. According to the Department of Labor, older women are especially likely to live in poverty, and caregiving responsibilities are a significant contributing factor.

Over the last several decades, women as a whole have made great strides from a financial standpoint. However, women caregivers still need help, and they need it now—especially if they’re older.

Here’s where we can start: First, we must reduce gender pay inequity and create paid leave and other caregiver-friendly workplace policies so that women can balance work with their responsibilities at home. Second, we need to bolster Social Security—the bedrock of retirement funding—for millions of women 65 and older. Finally, we need to keep pushing for commonsense legislation like the Credit for Caring Act recently reintroduced in Congress, which provides a tax credit for working family caregivers to offset their expenses.

With these first steps, we can begin the journey toward putting women and their families on firmer financial footing. Generations of women to come will thank us.