Foster Care and Child Welfare

This dissertation is comprised of three essays on the well-being of children who experience foster care. Foster care provides temporary, out-of-home placements for children, away from the perpetrators of abuse or neglect. Despite extensive discussion of the poor life outcomes foster children experience, our knowledge of the causal effects of a foster care placement is limited. I use unique data from South Carolina to estimate the causal impact of placement into foster care on children’s educational outcomes, delinquency, and Medicaid enrollment. To address the endogeneity of the decision to remove a child from their home, I use the idiosyncratic propensity to remove of the investigative caseworker as an instrumental variable.

In the first chapter, I measure the effects of a foster-care placement on exam scores, repeating a grade, a school attendance. For children on the margin, a foster care placement leads to a reduction in the probability of repeating a grade by 5.7 percentage points within one year of the investigation, by 12.4 percentage points within two years, and by 12.7 percentage points within three years. The estimated effects are even larger for children who are between the ages of five and eight at their investigation. While a removal leads to substantial improvement for the progression through school grades, I do not find strong evidence of increased exam scores or school attendance over the same period after removal.

Chapter two presents the analysis of the effect of entry into foster care on delinquency. I find that, for adolescents on the margin, a foster-care placement increases the probability of committing an offense by about 11 percentage points within five years. These effects are most substantial for males and black adolescents and are concentrated within the sample of children who committed an offense before their child protected services investigation. I do not find any effect of a placement on delinquency outcomes for children who were under the age of ten at intake.

The Medicaid data revealed that in the long run, children who experience foster care as a result ii

of their first intake are less likely to be enrolled in Medicaid than children who were not removed. I find evidence in favor or two different hypotheses: exiting poverty and the mismeasurement of enrollment. It is possible that the decline in enrollment is due to the increased economic activity of the birth parents while their children are in foster care, perhaps as a condition for family reunification. However, this finding may be attributable to censoring in the data or children being eligible but not enrolled. Further research is needed to determine which hypothesis is occurring.