Economics of Foster Care

25 Pages Posted: 4 Apr 2022 Last revised: 20 May 2022

See all articles by Anthony Bald

Anthony Bald

Harvard University

Joseph J. Doyle

Massachusetts Institute of Technology (MIT) - Economics, Finance, Accounting (EFA); National Bureau of Economic Research (NBER)

Max Gross


Brian A. Jacob

University of Michigan at Ann Arbor

Date Written: April 2022


Foster care provides substitute living arrangements to protect maltreated children. The practice is remarkably common: it is estimated that 5 percent of children in the United States are placed in foster care at some point during childhood. These children exhibit poor outcomes as children and adults, and economists have begun to estimate the causal relationship between foster care and life outcomes. This paper describes tradeoffs in child welfare policy and provides background on the latest trends in foster care practice to highlight areas most in need of rigorous evidence. These trends include efforts to prevent foster care on the demand side and to improve foster home recruitment on the supply side. With increasing data availability and a growing interest in evidence-based practices, there are opportunities for economic research to inform policies that protect vulnerable children.

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Suggested Citation

Bald, Anthony and Doyle, Joseph John and Gross, Max and Jacob, Brian A., Economics of Foster Care (April 2022). NBER Working Paper No. w29906, Available at SSRN:

Anthony Bald (Contact Author)

Harvard University ( email )

Cambridge, MA
United States

Joseph John Doyle

Massachusetts Institute of Technology (MIT) - Economics, Finance, Accounting (EFA) ( email )

50 Memorial Drive
Cambridge, MA 02142
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617-452-3761 (Phone)
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National Bureau of Economic Research (NBER)

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Max Gross

Mathematica ( email )

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Chicago, IL 60601

Brian A. Jacob

University of Michigan at Ann Arbor ( email )

500 S. State Street
Ann Arbor, MI 48109
United States

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