Explaining variations in state foster care maintenance rates and the implications for implementing new evidence-based programs

BackgroundU.S. Child Welfare systems are involved in the lives of millions of children, and total spending exceeds $26 billion annually. Out-of-home foster care is a critical and expensive Child Welfare service, a major component of which is the maintenance rate paid to support housing and caring for a foster child. Maintenance rates vary widely across states and over time, but reasons for this variation are not well understood. As evidence-based programs are disseminated to state Child Welfare systems, it is important to understand what may be the important drivers in the uptake of these practices including state spending on core system areas.Data and methodsWe assembled a unique, longitudinal, state-level panel dataset (1990–2008) for all 50 states with annual data on foster care maintenance rates and measures of child population in need, poverty, employment, urbanicity, proportion minority, political party control of the state legislature and governorship, federal funding, and lawsuits involving state foster care systems. All monetary values were expressed in per-capita terms and inflation adjusted to 2008 dollars. We used longitudinal panel regressions with robust standard errors and state and year fixed effects to estimate the relationship between state foster care maintenance rates and the other factors in our dataset, lagging all factors by one year to mitigate the possibility that maintenance rates influenced their predictors. Exploratory analyses related maintenance rates to Child Welfare outcomes.FindingsState foster care maintenance rates have increased in nominal terms, but in many states, have not kept pace with inflation, leading to lower real rates in 2008 compared to those in 1991 for 54% of states for 2 year-olds, 58% for 9 year-olds, and 65% for 16 year-olds. In multivariate analyses including socioeconomic, demographic, and political factors, monthly foster care maintenance rates declined $15 for each 1% increase in state unemployment and declined $40 if a state's governorship and legislature became Republican, though significance was marginal. In analyses also examining state revenue, federal funding, and legal challenges, maintenance rates increased as the federal share of maximum TANF payments increased. However, > 50% of variation in foster care maintenance rates was explained by unobserved state-level factors as measured by state fixed effects. These factors did not appear to be strongly related to 2008 Child Welfare outcomes like foster care placement stability and maltreatment which were also not correlated with foster care maintenance rates.ConclusionsDespite being part of a social safety net, foster care maintenance rates have declined in real terms since 1991 in many states, and there is no strong evidence that they increase in response to harsher economic climates or to federal programs or legal reviews. State variation in maintenance rates was not related to Child Welfare outcomes, though further analysis of this important relationship is needed. Variability in state foster care maintenance rates appears highly idiosyncratic, an important contextual factor to consider when designing and disseminating evidence-based services.     

Estimating minimum adequate foster care costs for children in the United States

Although foster care homes play a crucial role in providing stable placements to children who enter the child welfare system due to maltreatment, there is currently no federal minimum rate nor standard methodology to establish adequate rates to support foster parents to meet these children's needs. Therefore, it is important to establish a model to estimate the real costs associated with caring for children to serve as a foundation for states to set adequate reimbursement rates. The objectives of this study are to: use the methodology of a 2007 study to establish foster care minimum adequate rates for children (MARC) based on the child's age and geographical location in every state; update the MARC with cost of living adjustments to 2016; examine changes in gaps between the MARC and the current foster care rates; and identify states that have made increases to their reimbursement rates, relative to the MARC over time. Results found that all but four states provide lower foster care reimbursement rates than the adequate costs in 2016. This study recommends that, at the federal level, enhanced precision in operational definitions of care categories could increase consistency in the way that states reimburse foster families. Additionally, findings provide policy suggestions to establish a national methodology standard and increase foster care rates to the level that will meet children's needs. This study will enhance the scant body of literature found on establishing an economic model to estimate foster care costs.     

The relationship between child welfare financing,screening, and substantiation

This study examines the relationship between state-level child welfare spending and two important decision points in the child welfare system: the decision to screen out a referral and the decision to substantiate. The model is estimated using a pooled fractional probit estimator that controls for year effects and state-level clustering. The findings suggest that decreases in state-level child welfare expenditures predict increases in the proportion of referrals that are screened out and decreases in the proportion of maltreatment claims that are substantiated. The results are robust to the inclusion of caseload and federal spending as control variables, to the exclusion of states known to have changed their screening or funding practices during the sample period, and to the use of combined state and local child welfare expenditures as an explanatory variable in lieu of state-level child welfare expenditures. The findings imply that the amount of money a state spends on child welfare may influence important decisions in the child welfare process.     

Socioemotional Problems Among Young Children in Out-of-Home Care: A Comparison of Kinship and Foster Care Placement

This study examined socioemotional problems among children age 0 to 5 years in formal kinship and foster care across a northeastern state. Findings revealed that more than one third of children in both types of care showed socioemotional problems. More children were placed in kinship care when they lived in rural settings, were biracial, or spent time in the neonatal intensive care (NICU) after birth. Unique child and maltreatment characteristics predicted socioemotional problems scores for each placement type. Among children in kinship care, being biracial, spending time in the NICU, and being referred to child welfare for either caregiver substance abuse or neglect were related to socioemotional problems. When children were in foster care, spending time in the NICU, being referred to child welfare for child neglect, or being referred for intimate partner violence were all related to socioemotional problems. The results have implications for child welfare policy and practice, especially in light of increased efforts to place children with kin.     

Investments in young children among low-income families

This article examines low-income parents’ monetary investments in their young children, asking how low-income families are able to afford spending on children. We investigate parental spending on child care and on goods in the home that may provide enrichment for young children. We find little evidence that households make spending trade-offs for either type of good. Instead, our results suggest that low-income households that can afford child care may be poor only temporarily and that they spend primarily when they are unable to avoid doing so because of family work patterns. For enrichment goods, parental education is a stronger predictor of spending.     

TIMING IS MONEY: DOES LUMP‐SUM PAYMENT OF THE EARNED INCOME TAX CREDIT AFFECT SAVINGS AND DEBT?

Earned income tax credit (EITC) benefit income is paid out in a lump‐sum around tax time. We investigate whether savings and debt among EITC‐eligible families reflect the timing of payments. Using nationally representative, individual‐level data on self‐reported debt and savings outcomes, we search for differences in monthly behavior between EITC‐eligible and ‐ineligible households. We find evidence that credit card and unsecured debt holding among EITC‐eligible families reflects the timing of the EITC, with low debt levels at tax time relative to other months. Debt holding among ineligible families with children does not exhibit a similar pattern. We find limited evidence of intrayear patterns in savings behavior among EITC‐eligible families. (JEL D14, I38, H23)     

Do single mothers in the United States use the Earned Income Tax Credit to reduce unsecured debt?

The Earned Income Tax Credit (EITC) is a refundable credit for low-income workers mainly targeted at families with children. This study uses the Survey of Income and Program Participation’s topical modules on Assets and Liabilities to examine associations between the EITC expansions during the early 1990s and the unsecured debt of the households of single mothers. We use two difference-in-differences comparisons over the study period 1988–1999, first comparing single mothers to single childless women, and then comparing single mothers with two or more children to single mothers with exactly one child. In both cases we find that the EITC expansions are associated with a relative decline in the unsecured debt of affected households of single mothers. While not direct evidence of a causal relationship, this is suggestive evidence that single mothers may have used part of their EITC to limit the growth of their unsecured debt during this period.     

Effects of federal programs on children: Absolute poverty, relative poverty, and income inequality

Since the 1996 welfare reform, federal spending on means-tested programs targeting the poorest children has decreased, while programs that benefit children in low-income working families have been expanded substantially. With this background, this study examined changes in the antipoverty and anti-inequality effects of children's programs between 1995 and 2007 using data from the Annual Social and Economic (ASEC) Supplements to the Current Population Survey (CPS). The findings suggest that although the poverty-reduction effects of the federal child programs increased between 1995 and 2007, the programs' effects on the reductions of children's absolute poverty gaps, relative poverty rates, relative poverty gaps, and income inequality all decreased. More importantly, the antipoverty effects of the federal child programs were most weakened for the poorest children (i.e., those in female-headed, immigrant, and nonworking families) between 1995 and 2007.     

Prevalence,experiences, and characteristics of children and youth who enter foster care through voluntary placement agreements

A voluntary foster care placement (sometimes referred to as a voluntary placement agreement) is an agreement, entered into without court involvement, between a state or county child welfare agency and a child's parents to place a child into out-of-home placement. When a child enters foster care through this type of placement, state and federal programs that cover children who enter child welfare due to a court order become the custodians of the voluntarily-placed-child's placement, care, and supervision. In this cross-sectional, exploratory study, data from the Adoption and Foster Care Reporting System (AFCARS) was used to examine the characteristics and experiences of children who enter foster care through a voluntary foster care agreement, and to compare them with those of children who enter foster care through a court order. Findings indicate that children who are placed through a voluntary placement agreement differ from children who enter through a court order in their personal characteristics, as well as in their placement settings, length of placement, and manner of discharge from foster care. This study provides a baseline for future research into this area of child welfare practice.     

Can ‘refundable’ state Earned Income Tax Credits explain child poverty in the American states?

This study estimates the effect of ‘refundable’ state Earned Income Tax Credits (EITCs) on child poverty from 1994 through 2003. Research results indicate that a refundable state EITC is associated with reductions in child poverty, holding all other variables constant. For example, states with refundable state EITCs have observed a 40% greater reduction in child poverty rates compared to states without refundable state EITCs. This study also discusses policy implications for implementing the ‘refundable’ state EITC.     

Foster child health care supervision policy

Foster children represent a high-risk group for physical, emotional, and social health problems, yet few federal or state policies explicitly address foster child health. This article reviews foster child health and the legal background for policy, then discusses components of a comprehensive health care supervision program.     

Kinship Care Providers: Designing an Array of Supportive Services

Kinship care, the placement of children with their relatives, has become an integral part of the child welfare system in the United States. It is also becoming a more established way of meeting the needs of children in care in other western countries (Greeff, 1999). However, kinship care did not emerge as a child welfare issue until the late 1980s, and only recently has it become a part of the formalized system for out-of-home care (Hegar & Scannapieco, 1995). Since that time, many states have come to rely more heavily on placements with relatives to meet the needs of children removed from parental custody. For example, California has placed approximately 51% of the foster care population in kinship care, while Illinois has placed 55% (GAO, 1999).Discussion about the reasons for the increases in kinship care has been widespread (Brooks & Barth, 1998; Gleeson, 1999; Harvey, 1999; Hegar & Scannapieco, 2000). Regardless of the impetus behind the increased use of kinship care, states must now incorporate kinship foster care into the traditional foster care system in order to qualify them for federal funding (O'Laughlin, 1998). The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 amended federal law to require that states give priority to relatives when deciding with whom to place children who are in the foster care system (GAO, 1999).The apparent paradigm shift from traditional foster parents to kinship care parents (Hegar, 1999) requires that agencies use both different approaches to assessment (Scannapieco & Hegar, 1996) and provide different types of intervention and services. Adapting placement services to the needs of kinship care providers is the focus of this article.     

Alcohol control and foster care

Parental alcohol consumption is often associated with an increased likelihood of child abuse. As consumption is related to price, the purpose of this paper is to investigate the propensity for increases in the full price of alcohol to influence entry rates and the length of time spent in foster care. Using alcoholic beverage prices and a measure of availability in combination with data on foster care cases, we find that higher alcohol prices are not effective in reducing foster care entry rates; however, once in foster care, the duration of stay may be shortened by higher prices and reduced availability.     

Financial well-being in family-based foster care: Exploring variation in income supports for kin and non-kin caregivers in California

Kinship foster parents have the same responsibilities as nonrelative foster parents and are held to the same standards of rehabilitative care. Nonetheless, their rights to financial supports and their access to other services vary across states depending on the federal eligibility of the child, and/or the licensing criteria caregivers may or may not meet. We know little about the financial supports, well-being, or services of kinship caregivers receiving differential payment schemes and whether or not these financial supports and services make any difference. More fundamentally, in states that operate two- or more -tiered funding schemes for kinship foster parents, we currently cannot even estimate what proportion of kin caregivers receive more, less, or nothing from the government, even though all are entitled to something. Kin and non-kin caregivers in two California counties responded to a written survey focused on the financial wellbeing and income supports available to families. Sources of support were associated with the availability and utilization of other child welfare services for caregivers and for children.     

From Foster Care to Adoption and Guardianship: A Twenty-First Century Challenge

For nearly four decades, child welfare policy and practice have focused on the achievement of legal permanence for children in foster care. Although federal child welfare policy has resulted in the movement of children from state custody to legally permanent adoptive or guardianship families, little is known about the quality and enduring nature of these placements. A significant challenge of the twenty-first century child welfare system is how to ensure the well-being of children currently living with adoptive parents or guardians. This paper discusses child welfare policy and trends related to post-permanency well-being, including the decrease in Title IV-E foster care caseloads nationwide and the simultaneous increase in Title IV-E adoptive and guardianship caseloads. We highlight the needs of a twenty-first century child welfare system, including increased federal efforts to ensure child permanence and well-being after legal adoption or guardianship has been achieved, as well as more rigorous longitudinal and interdisciplinary research focused on the post-permanency adjustment of children and their families.     

Prevalence and economic well-being of families raising multiple children with disabilities

This study estimates the prevalence of households raising more than one child with disabilities, and examines these families' economic well-being. Using pooled data from the 2004 and 2008 Survey of Income and Program Participation we compare households with multiple children with disabilities (n = 932) to households with one disable child (n = 3457) and to households with at least one child but none with disabilities (n = 21,378) on measures of material hardship. Three percent of U.S. households with children had more than one disabled child. Compared to other households with children, those with multiple children with disabilities were significantly more likely to have income below the federal poverty level and to report material hardships. The number of children with disabilities is an important contextual variable for studying the economic circumstances under which, care is provided to children with disabilities. Its implications for practice and policy are discussed.     

Post-permanency discontinuity: A longitudinal examination of outcomes for foster youth after adoption or guardianship

For over two decades, federal policies and case practices in child welfare have shifted to prioritize legal permanence for children in foster care, and increasing numbers of children have been placed in permanent adoptive or guardianship homes. Despite this change, little research has examined the long-term stability of legally permanent adoptive and guardianship homes for former foster youth. This study used child welfare administrative records to track a population of 51,576 children in Illinois who exited foster care through adoption or guardianship for ten years or until the age of majority. Univariate and bivariate analyses were conducted to describe the population, and a multivariable Cox proportional hazards model was estimated to examine the relationship between child age and discontinuity, controlling for several pre-placement characteristics. Results indicated that the vast majority (87%) of children did not experience post-permanency discontinuity. In addition, African American children and children who had more moves in foster care had a higher hazard of discontinuity, while children placed with siblings and children who spent three or more years in foster care had a lower hazard of discontinuity. Study findings also indicated that prevention efforts should be targeted at families with adolescents. This study contributes significantly to the scant literature on long-term outcomes for adoptive and guardianship families, and suggests several areas for future research.     

THE EFFECT OF NONCONTRIBUTORY PENSIONS ON SAVING IN MEXICO

This paper examines the effects of noncontributory pension programs at the federal and state levels on Mexican households' saving patterns using micro data from the Mexican Income and Expenditure Survey. We find that the federal program curtails saving among households whose oldest member is either 18–54 or 65–69 years old, possibly through anticipation effects, a decrease in the longevity risk faced by households, and a redistribution of income between households of different generations. Specifically, these households appear to be reallocating income away from saving into human capital investments, like education and health. Generally, state programs have neither significant effects on household saving, nor does the combination of federal and state programs. Finally, with a few exceptions, noncontributory pensions have no significant impact on the saving of households with members 70 years of age or older—individuals eligible for those pensions, plausibly because of their dissaving stage in the lifecycle. (JEL D14, J26, O12, H55)     

Tax incentives and family labor supply in Austria

The family policy reform 2009 introduced tax deductibles for children and child care expenditures in Austria. In this paper we evaluate this reform based on a structural labor supply model with unitary households which has been estimated on the European Statistics on Income and Living Conditions cross-sections 2004–2008. We find that the reform had only small employment effects, most of them being generated through the introduction of a child care deductible. However, to illustrate the employment potential of a shift from universal child transfers to tax deductibles we propose additional simulations showing that such a policy shift would yield an increase in full time equivalents of approximately .70 % of overall employment, with married females increasing their labor supply by up to 1.5 %. While the proposed policy shifts have regressive effects in terms of their distributional impact, we show that phasing-out the tax deductible at higher income allows for the compensation of lower-income households without jeopardizing positive employment effects.     

Enhancing the validity of foster care follow-up studies through multiple alumni location strategies

While family-based placement prevention services, family reunification programs, subsidized guardianship, and aggressive adoption programs are reducing the numbers of children spending long periods of time in substitute care, a significant number of America's children will come of age in foster care. Agencies and policymakers should use research and evaluation to assess the effectiveness of foster care in nurturing healthy adults and to explore ways to improve services. Outcome studies that have focused on locating and interviewing young or middle-aged adults emancipated from foster care have been hampered by modest response rates, limiting the field's ability to evaluate the efficacy of foster care programs. This article describes a set of strategies that were used to achieve higher response rates in two recent follow-up studies.