Grandparent caregiving is becoming common and plays an important role as one of the informal care in many countries. This study examines whether grandparent caregiving has a causal effect on grandparents’ health, cognitive functioning and satisfaction with life. To assess the causal effect, we estimate a fixed effects instrumental variable model by using the presence of a child aged 30-39 years and a married child as instruments. The estimation results reveal that grandparent caregiving has a positive effect. Grandparent caregiving is predicted to increase the probability of considering own health status as above average by 46.1%p, improve cognitive functioning by 10.256 points and overall satisfaction with quality of life by 20.047 points. In addition, the effect is noticeable among females as well as aged 55-74 years.