The Aging Population and the Rise of the Paid Care Economy
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Insights from the 2026 NABE Economic Policy Conference
By: Margaret Gachau, The Quinnipiac University Global Economics Research Team
In today’s report on the healthcare economy:
Ongoing demographic change will likely increase the demand for paid care in the coming decades.
Structural drivers reinforcing demand for paid long-term care:
Declining fertility shrinks the pool of potential family caregivers.
Increased employment among women, shifting care from unpaid to market-based provision.
Ongoing demographic change will likely increase the demand for paid care in the coming decades.
With more Americans entering retirement and life expectancy rising, the number of older adults requiring assistance is projected to grow substantially. Estimates suggest that the share of the 65+ population with significant disabilities will rise from 14% in 2020 to 16% by 2065, alongside a nearly doubling in the total number of individuals with care needs. Taken together, these trends suggest a persistent expansion in demand for paid care services over the coming decades.
Source: Richard W Johnson, (2026, February 22). The Aging Workforce and the Care Economy. Presentation at the National Association for Business Economics (NABE) Economic Policy Conference (Used under fair use for educational commentary by The Quinnipiac Global Economics Research Team.)
Structural drivers reinforcing demand for paid long-term care.
Declining fertility shrinks the pool of potential family caregivers.
Source: Richard W Johnson, (2026, February 22). The Aging Workforce and the Care Economy. Presentation at the National Association for Business Economics (NABE) Economic Policy Conference (Used under fair use for educational commentary by The Quinnipiac Global Economics Research Team.)
It’s evident that persistently low fertility rates are reshaping the future supply of informal care. The U.S. total fertility rate has declined from 3.6 in 1960 to 1.6 in 2020, remaining well below replacement levels in recent decades. Smaller family sizes imply fewer adult children available to provide unpaid support to aging parents, structurally reducing the pool of potential family caregivers.
Source: Caregiving in the U.S. 2025 - AARP Research Report (Used under fair use for educational commentary by The Quinnipiac Global Economics Research Team.)
As shown in the figure above, this shift is economically significant given that informal care remains the dominant model of long-term support. Approximately 89% of care recipients rely on relatives, with nearly half (47%) cared for by a parent or parent-in-law. As family caregiving capacity contracts, demand for market-based long-term care services is likely to rise correspondingly.
Increased employment among women, shifting care from unpaid to market-based provision.
Source: Caregiving in the U.S. 2025 - AARP Research Report (Used under fair use for educational commentary by The Quinnipiac Global Economics Research Team.)
Women remain the primary providers of informal care, accounting for 61% of caregivers compared to 38% for men. The average caregiver age is approximately 50 years, with the largest share (33%) between ages 50–64. This concentration in prime working years underscores the economic tension between caregiving responsibilities and labor market participation, particularly for mid-career women who are often balancing employment with care obligations.
Source: Richard W Johnson, (2026, February 22). The Aging Workforce and the Care Economy. Presentation at the National Association for Business Economics (NABE) Economic Policy Conference (Used under fair use for educational commentary by The Quinnipiac Global Economics Research Team.)
At the same time (as per the figure above), women’s labor force participation has risen steadily over the past several decades. For example, labor force participation among women aged 55–64 increased from approximately 40% in 1980 to over 60% by 2025, while participation among those aged 45–54 rose from about 60% to nearly 80% over the same period. As more women remain engaged in paid employment later in life, the availability of unpaid caregiving declines, reinforcing the shift from family-based support toward market-based long-term care services. This transition, in turn, increases labor demand within the formal care sector.
Additional Reading
References
(Caregiving in the U.S. 2025 - AARP Research Report, 2025, p. 140) https://www.caregivingintheus.org/app/uploads/2026/02/Final-2025-CGUS-Report-1.pdf
Richard W Johnson, (2026, February 22). The Aging Workforce and the Care Economy. Presentation at the National Association for Business Economics (NABE) Economic Policy Conference. (Images)
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