While several studies have measured the direct costs of informal caregiving for Alzheimer's patients, indirect costs such as income losses to working caregivers and productivity costs to their employers have received little attention. OBJECTIVES: This study estimates employment-related costs of caregiving for Alzheimer's patients and the effects of the cholinesterase inhibitor, rivastigmine, on these costs. METHODS: Employment-related costs of informal Alzheimer's caregiving were imputed from several studies on Alzheimer's and caregiving, including findings from the NAC/AARP survey of family caregivers. Published employment-related costs, which applied to all caregivers of the elderly, were made Alzheimer's specific and differentiated by disease stage. These estimates were linked to clinical trial scores (Progressive Deterioration Scale) for rivastigmine to estimate savings in employment-related costs associated with this Alzheimer's therapy. RESULTS: Productivity costs to employers per working, informal Alzheimer's caregiver are $2,187 yearly, while yearly income losses to working caregivers are $11,525. Total productivity costs to employers are $1.89 billion annually while total income losses to caregivers are $9.96 billion annually. Employment-related costs are highest for informal caregivers of Alzheimer's patients in the moderate disease stage because of a higher concentration of these patients in the community compared to patients in the severe stage who tend to be institutionalized. Based on its slowing of Alzheimer's patient deterioration, rivastigmine would save annually $268 million (14.2%) of total productivity costs to employers and $1.41 billion (14.2%) of total income losses to caregivers. Rivastigmine's effects in slowing Alzheimer's patient deterioration are strongest in the moderate disease stage. Coupled with higher employment-related costs in this stage, rivastigmine's cost-saving effects would also be highest in the moderate disease stage. CONCLUSION: Employment-related costs of informal Alzheimer's caregiving are substantial. Therapies such as rivastigmine can significantly reduce these costs, particularly in the moderate disease stage where costs and rivastigmine's effects are greatest.