Does grandchild care influence grandparents' self-rated health? Evidence from a fixed effects approach

•The article examines health consequences for grandparents providing grandchild care.•The article focuses on supplementary grandchild care and Self-Rated Health.•The article compares different panel model approaches with each other.•Controlling for unobserved (time-constant) heterogeneity leads to null-effect results.

The present study aims to identify, whether and how supplementary grandchild care is causally related to grandparents' self-rated health (SRH). Based on longitudinal data drawn from the German Aging Survey (DEAS; 2008-2014), I compare the results of pooled OLS, pooled OLS with lagged dependant variables (POLS-LD), random and fixed effects (RE, FE) panel regression. The results show that there is a positive but small association between supplementary grandchild care and SRH in POLS, POLS-LD, and RE models. However, the fixed effects model shows that the intrapersonal change in grandchild care does not cause a change in grandparents' SRH. The FE findings indicate that supplementary grandchild care in Germany does not have a causal impact on grandparents' SRH, suggesting that models with between-variation components overestimate the influence of grandchild care on grandparents' health because they do not control for unobserved (time-constant) heterogeneity.