Childcare is one of the main determinants of women’s participation in the labor market, especially during early childhood. In contexts where access to childcare services is limited, family networks play a central role in families’ daily organization. Within these networks, grandmothers are often a key source of support, although their contribution is not always visible or quantified. What happens when these grandmothers stop working and have more time? Can their retirement from the labor market have a direct effect on the economic activity of their daughters who are raising young children?
A study conducted in Argentina shows that grandmothers’ retirement has a significant impact on mothers’ employment. When grandmothers—who live in the same household—stop working, their daughters are much more likely to enter (or return to) the labor market. This finding highlights something many families experience daily: family networks, and particularly grandmothers, are a crucial part of how childcare is organized in many countries across the region.
Care and Women’s Labor Participation
The arrival of a child often marks a significant turning point in many women’s career paths. In Latin America, for example,more than 50% of women who are not in the labor market cite reasons related to domestic and care work as the main cause. The lack of accessible, quality public childcare services exacerbates this pattern, limiting many women’s opportunities to maintain or resume employment after becoming mothers.
In this context, informal care provision becomes especially important in families, particularly through grandmothers. In Argentina, for example, 34% of women aged 60 to 74 report regularly caring for a child in their family, according to data from the National Quality of Life Survey for Older Adults. However, this contribution is often absent from diagnoses and the design of public policies.
A Pension Reform as a Natural Experiment
The study compares two groups of mothers with children under five who lived with a grandmother: on one hand, those whose mother (or mother-in-law) had already reached retirement age; on the other, those whose mothers had not yet reached that age. The study estimated how the labor participation and employment of mothers changed in both groups before and after the implementation of this policy.
The results show that when a grandmother retires, the likelihood of the mother participating in the labor market increases by 4 percentage points, and her probability of being employed increases by nearly 8 points.
The first explanation seems obvious: if the grandmother stops working, she has more free time, and that time can be used to care for her grandchildren (especially given that the study examines grandmothers living with their daughters and grandchildren). But there may also be an income effect: by receiving a pension, the grandmother contributes resources to the household that could be used, for example, to pay for transportation, external care, or work-related expenses.
The study tests both hypotheses. It finds that grandmothers do reduce their labor participation after retirement, which suggests they gain available time. But although their income increases, there is no evidence that this money is used to pay for childcare services. Nor is a similar effect observed in households where the grandfather is the one who retires, reinforcing the idea that what matters is the grandmother’s availability—not just a rise in household income. Furthermore, the effect of the grandmother’s retirement is stronger when the mother is single or has no older children.
Care, in Women’s Hands
This finding reveals a double intergenerational transmission pattern related to caregiving. On one hand, grandmothers take on caregiving responsibilities when their daughters are unable to balance work and childrearing. On the other, grandmothers’ availability becomes a determining factor for whether their daughters can participate in the labor market.
The study confirms what many families experience daily: without support networks, balancing work and parenting is hard to achieve. That is why advancing public policies that expand access to care (such as daycare centers, family leave, and flexible schedules) is important to ensure that all women have the same opportunities. In the meantime, many grandmothers will continue to play a quiet yet fundamental role in their families’ well-being. Read more about this study published in the University of Chicago Press here.
If you want to learn more about the future of pensions in Latin America and the challenges posed by population aging, don’t miss this publication with concrete proposals to build fairer and more sustainable systems. Click here.
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