Academic journal article Economic Inquiry

An Empirical Analysis of Adoption

Academic journal article Economic Inquiry

An Empirical Analysis of Adoption

Article excerpt


Adoption is as old as recorded history. It was practiced by the ancient Egyptians, Greeks, and Romans. Technically, adoption is a legal procedure by which a couple, or, less commonly, an individual, takes someone else's child into their family and raises it as their own. The child may be unrelated to either adoptive parent, but is often the child of one member of the couple or related in some other way to the adoptive parents. Adoption severs all legal ties between the birth parents and the child and replaces them by a legal relationship between the child and the adoptive parents. In most cases of adoption, the birth parents voluntarily surrender their parental rights so that an adoption can take place.

It seems highly likely that the U.S. Supreme Court will allow further restrictions on the availability of abortion. As a consequence, considerable attention is certain to be focused on the adoption option and its social implications. Prior to 1970, fertility behavior was little studied by economists, partly because it was thought that the determinants were largely noneconomic. During the past two decades, however, economists using a choice-theoretic framework have examined a variety of fertility issues such as marriage (Becker |1974~), procreation and children (DeTray |1973~), birth control (Willis |1973~), and abortion (Leibowitz, Eisen, and Chow |1986~). Surprisingly, no economic research exists on the issue of adoption, despite the fact that it represents a natural extension of the traditional theory of consumer choice. Most adoption research focuses on sociological issues such as infertility or adoption procedures. This paper empirically estimates the supply of adoptions using the decision-making economic framework of completed fertility developed by Becker |1960~ and extended by Michael |1973~. I believe their model's determinants of desired fertility and family size will also be significant in explaining a household's decision to give up a child for adoption. Section II outlines the adoption model and relates it to the economic theory of desired fertility and family size. The third and fourth sections discuss the empirical estimates of the adoption model. The fifth section examines the impact of various state regulations on the adoption decision, and the last section discusses public and social implications of the empirical results.


Michael argues that households' decisions concerning desired family size and the timing of childbearing can be explained in terms of a household production function. Michael's model is based on a comparison of the benefits and costs from an additional child over time. His theory of completed fertility purports to be over a household's full reproductive age span, but it is in actuality a period by period analysis. Households are myopic in that, although they consider the future costs and benefits of a child, an independent decision is made in each period regarding whether to have a child. A household's optimal family size may be, for example, two children. But if when the first child is conceived the household perceives the timing of the birth as undesirable, then, at that point in time, the net benefit from the additional child is negative. The consequence is that the child is "unwanted," and the household will take steps to reduce the discrepancy between the desired and actual stock of children.

One possible solution is an adoption. Once a child is born, a household has two choices: keep the child or put it up for adoption. Michael's framework implies that the likelihood that a household will place a child for adoption is positively related to the (negative) discrepancy between the household's desired and actual stock of children at that time. The factors affecting a household's desired family size--income, time values, relative productivities, and revealed tastes--are reflected in the discrepancy between the desired and actual stock of children. …

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