Academic journal article Contemporary Economic Policy

Benefits and Costs of Intensive Foster Care Services: The Casey Family Programs Compared to State Services

Academic journal article Contemporary Economic Policy

Benefits and Costs of Intensive Foster Care Services: The Casey Family Programs Compared to State Services

Article excerpt


Over 3 million reports of child abuse or neglect are recorded annually in the United States. Protective services investigations of these reports conclude that more than 900,000 children are victims of maltreatment. (1) One-fifth of the victims are placed in out-of-home care. Another 110,000 children are placed in such care each year because of child behavior problems or because of reentry of children who were previously in care--"reunification failures." About 800,000 children per year in recent years have received foster care in family and nonfamily settings, or about 1% of children in America. (2), (3) The average daily census is approximately 510,000 (U.S. Department of Health and Human Services, Administration for Children and Families, Children's Bureau, 2008b).

The child welfare system that investigates such reports and provides services to children and families is financed by a patchwork of federal, state, and local government budgets that total approximately $25.7 billion per year. (4) In addition, private child welfare agencies provide resources beyond what they receive from government funds (DeVooght, Allen, and Geen, 2008). Even with this level of funding, the U.S. Government Accountability Office (2004), the Pew Commission (2004), and others have documented that the foster care system needs reform, workers have excessive caseloads, and poor salaries and working conditions lead to high staff turnover and uneven job performance.

Foster care services represent a major social investment. This study evaluates whether the social rate of return on expansion or improvement of services would be a good public investment. To our knowledge, this is the first benefit-cost analysis (Benefit-Cost Analysis) of foster care services comparing public foster care to private foster care.

One approach to address this question would be to randomly assign maltreated youth to foster care or to alternative services while they remained with their birth parents. Because of the ethical constraints against allowing children to remain in a home where maltreatment has occurred, studies can rarely use such a research design. The one evaluation that did so, conducted by Wald, Carlsmith, and Leiderman (1988), was severely compromised by sampling problems.

A small number of studies have used an alternative research design that compares the functioning of maltreated youth placed in foster care to a group of youth in the general population matched on certain family and youth characteristics. (5) Such comparisons are likely to be biased because the types of children victimized by maltreatment are unlikely to be a random sample even of a population matched on family or youth characteristics. Other studies have used a pre-post design to compare the functioning of children before and after placement in foster care. Pre-post comparisons do not allow examination of foster care's impact on adult outcomes because "pre" data collected in childhood contain no information on adult outcomes such as college completion or marriage. The problems of inferring the effects of interventions from pre-post comparisons are well known (Rossi, Lipsey, and Freeman, 2004). Additionally, the use of brief follow-up periods (6 mo after foster care) and relatively small sample size (often less than 150 subjects) prevent drawing strong conclusions from these studies.

Evidence from studies that have used the above designs to estimate the effects of foster care has been mixed. (6) The dearth of methodologically convincing control or comparison group studies of the outcomes of foster care has made it difficult to establish consistent standards for care, to consider how successfully particular services have helped foster youth, and to assess the net societal return on the investment in foster care.

The current study takes a different approach. The adult outcomes of youth who received enhanced family foster care services from a longstanding voluntary agency were compared to outcomes of youth who received typical services from large state agencies. …

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