Federal incentives to move children from foster care to permanency through adoption have been altered several times over the past 25 years. A major realignment of incentives for adoption took place at the start of this calendar year. With the close of fiscal year 2002, came the end of the Adoption Incentive Program, a system of bonuses paid to states for increases in adoptions from foster care. New incentives are aimed at families. Families who finalize an adoption from foster care after January 1, 2003, will receive a new, unqualified, $10,000 tax credit. It is not possible to predict how effective the new tax incentive will be. While the effectiveness of some earlier incentive programs has been researched, no research on the relative effectiveness of the federal incentives to promote adoption, or of the combinations of incentives in effect, have been published to date. This study assesses the relative effectiveness of incentives to move waiting children from foster care to adoption. The theory of two-sided matching provides the conceptual framework. The empirical results will show whether federal incentives since the mid-1980s have had any measurable impact on the adoption rates across the states. Specific questions include: Are families or states more responsive to incentives? Are families more responsive to incentives that reduce the up-front cost of adopting a child or to incentives that reduce the long-term costs of raising a child? Additionally, because some federal incentives are implemented differently by different states, the following question will be asked: Are some states more successful at increasing adoption rates? If so, which elements of state policy and practice account for the relative successes of the states? Future work will be conducted to widen the scope of the analysis in three ways. First, when data becomes available, the effectiveness of the most recent tax incentives relative to previous incentives will be considered. Second, the decision to build families through adoption will be modeled in more detail. Finally, the institutional structures of state departments of child protective services to better understand how waiting children are matched with families will be studied. ? ?

National Institute of Health (NIH)
Eunice Kennedy Shriver National Institute of Child Health & Human Development (NICHD)
Small Research Grants (R03)
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Study Section
Pediatrics Subcommittee (CHHD)
Program Officer
Bachrach, Christine
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American University
Social Sciences
Schools of Arts and Sciences
United States
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Hansen, Mary Eschelbach (2008) Distribution of a Federal Entitlement: The Case of Adoption Assistance. J Socio Econ 37:2427-2442
Hansen, Mary Eschelbach (2007) State-Designated Special Needs, Post-Adoption Support, and State Fiscal Stress. Child Youth Serv Rev 29:1411-1425