At the end of 2003, there were 523,085 children in the United States in foster care. The vast majority of foster children come from disadvantaged backgrounds and are at much greater risk for emotional and health problems than their peers. Because research suggests that adoption may be one of the most promising options for the placement of these at-risk children, policies have been introduced at all levels of government to encourage adoption. In 1980, Congress passed the Adoption Assistance and Child Welfare Act, which provided federal funds for monthly adoption subsidies to families that adopt special-needs children and children in foster care. From 2000 to 2003, 88.7% of the 202,087 children adopted through child welfare services received a subsidy, with the average amount being $544.83 per month. This project evaluates the success of this large public policy initiative in light of the program''s key goals of encouraging adoption and reducing stays in foster care.
Administrative data from state child welfare agencies on adoptions taking place between 2000 and 2005 is analyzed to identify the effects of adoption subsidies on the amount of time children spend in foster care and the characteristics of adoptive families. In addition, the adoption data is linked to foster care records using a statistical matching process, which allows the investigator to study how subsidies affect the probability of adoption for children in foster care. The project improves upon previous studies of the adoption subsidy program, which have only been able to show correlations between subsidy receipt or amount and adoption outcomes. Because eligibility for the subsidy program is dependent upon characteristics of the child, state, and adoptive family, the results of these studies can be misleading. Using an estimation strategy that is based on state variation in the age at which children are eligible for federal subsidy funds, the investigator is able to identify a causal relationship between subsidy receipt and amount and the probability of adoption, duration of time in foster care, and characteristics of adoptive families. In addition to improving upon the current work in this area, this research fits in with a broader literature in economics and sociology on household decision making. The investigator is able to estimate how decreases in the cost of caring for children affect families'' willingness or ability to expand their family size. The role of relatives such as grandparents in caring for at-risk children is also explored.
Broader Impacts: This project assesses the efficacy of the adoption subsidy program in helping at-risk children and families. This research is of interest to policy makers at a time when the future funding of the program is in question. Also, child welfare agents can learn how to use or distribute the subsidy funds more effectively to help children in this vulnerable population. The results are also important for researchers in all disciplines who are interested in policy analysis. Differences in results obtained using the estimation technique described above and previous research highlight the need to use carefully chosen empirical methods to estimate the causal effects of policy.
