Methods: Using data from Wave 3 of the Midwest Evaluation of the Adult Functioning of Former Foster Youth (N = 592), a series of Tobit models were used to test which, if any, demographic, human capital, and independent living service variables were related to earnings. Tobit regression and Tobit decomposition were used to generate earnings estimates due to the highly skewed nature of earnings for this population, with more than half the youth earning no money. Four additive models were run, one with only demographic independent variables, the second includes human capital variables, and the third and fourth add independent living variables.
Results: The study found results similar to other studies with respect to demographics and the youths' annual earnings. In Model 1, race was the only statistically significant variable. In Model 2, race remained significant, and presence or history of a mental health problem was negatively associated with annual earnings. The presence or history of alcohol or drug use was positively associated with yearly earnings. In Model 2 having higher levels of education resulted in greater yearly earnings. Model 3 results produced similar findings to Model 2; however, this model included an ILP Employment Services scale that utilized 12 items related to employment services that youth could attend. The ILP scale variable was not statistically significant. Model 4 was estimated using the ILP Employment Services items as individual variables and found the same items significant as in Model 3.
Implications: Disparities in earnings exist between former foster youth and non-foster youth, and among sub-populations of former foster youth. Additional work must be done to ensure that foster youth are completing high school and college, and receiving relevant services while in care to give them the best opportunity at earning a living wage after discharge. The twelve ILP employment services used in this study need to be further tested for their effectiveness in increasing foster youth earning potential as this study found no statistical significance. However, education attainment was found to be significant in increasing yearly earnings and continued focus on improving foster youth college attendance is supported by this study.