University of Georgia
R. Vincent Pohl, PhD Photo courtesy of the
A spouse’s cancer diagnosis can significantly diminish family income, according to research published in the Journal of Health Economics.
Investigators tracked changes in employment and income among working-age couples in Canada and found that, on average, a spousal cancer diagnosis results in a 5% decline in household income for men and a 9% decline for women.
“The average annual household income for the working-age couples we studied was about $100,000, so the loss of income per family is about $5000 to $9000, which is a pretty substantial decline,” said study author R. Vincent Pohl, PhD, of the University of Georgia in Athens, Georgia.
“In a situation where one household member has a devastating diagnosis, it leads to the whole household suffering economically.”
One reason for the income decline is attributed to what’s known as the caregiver effect—when one family member reduces his or her own employment to support another.
“We thought that the household’s lessened income could happen in one of two ways,” Dr Pohl said. “One is that the person who is diagnosed might not be able to work because they are getting treatment or they’re too sick to work.”
“The second is what happens to their spouse. Does the spouse work more to make up for the lost income or does the spouse also reduce his or her labor supply in order to take care of the spouse that is diagnosed with cancer? We find the latter, that spouses reduce their labor supply and therefore have lowered income levels, which leads to the household having lower income levels as well.”
The investigators found that, in the 5 years after a spouse’s cancer diagnosis, both husbands and wives reduced their employment rates by about 2.4 percentage points, on average.
The women had lower average employment rates, so the decrease represented a larger relative decline for them.
When a wife was diagnosed with cancer, her husband’s annual earnings decreased by about $2000, or 3.5% of his income.
When a husband was diagnosed with cancer, his wife’s annual earnings decreased by about $1500, or 6% of her income.
Total family income decreased by up to 4.8% among men and 8.5% among women.
The investigators found the declines were due to lower earnings among both cancer patients and their spouses.
“What we need to think about, in terms of policy implications, is how we can protect not just individuals from the consequences of getting sick, but their entire family,” Dr Pohl said. That’s not really something that existing policies do.”
“If you think about disability insurance, it’s a function of an individual’s inability to work. It doesn’t take into account that family members might have to take care of an individual and therefore might also lose their job or reduce their working hours and, thus, their income.”
Dr Pohl said this study allowed the investigators to examine behavior on a level that’s representative for the entire country of Canada, but the findings may not be transferable to the US, where healthcare is handled differently than in many developed nations.
“One reason why we don’t see that the spouse works more, potentially, is that health insurance is not provided through jobs in Canada,” Dr Pohl said. “In the United States, we could expect that if one spouse is diagnosed with a disease, the other spouse has to keep their job in order to keep health insurance for the family.”
