AbstractThis study aims to measure the causal effect of informal caregiving on the health and health care use of women who are caregivers, using instrumental variables. We use data from South Korea, where daughters and daughters‐in‐law are the prevalent source of caregivers for frail elderly parents and parents‐in‐law. A key insight of our instrumental variable approach is that having a parent‐in‐law with functional limitations increases the probability of providing informal care to that parent‐in‐law, but a parent‐in‐law's functional limitation does not directly affect the daughter‐in‐law's health. We compare results for the daughter‐in‐law and daughter samples to check the assumption of the excludability of the instruments for the daughter sample. Our results show that providing informal care has significant adverse effects along multiple dimensions of health for daughter‐in‐law and daughter caregivers in South Korea. Copyright © 2013 John Wiley & Sons, Ltd.