Variations in the Costs of Children in out-of-Home Care: Cost Trajectories Over the 24-Month Period

Background and Purpose: Policymakers and child welfare professionals are increasingly demanding information on costs for foster children in order to examine the success of out-of-home care services. It is critical to assess the worthiness of services and programs in a financial sense, especially when these resources are limited. The purpose of this paper is to better understand variations in individual-level costs for children in out-of-home care.

Methods: This study used longitudinal administrative data which include information on placements and individual-level costs of all children entering the foster care system in North Carolina. In particular, this study calculated the monthly costs for children (n=1,707) who entered foster care for the first time from July 2004 through June 2005, and stayed for 2 years or longer. Children's placement histories and their monthly costs for 24 months from entry into foster care were tracked. To estimate the association with foster care costs, demographic characteristics (e.g., age, race/ethnicity, disability, prior maltreatment history) and foster care experiences (e.g., the number of placements, types of placements, length of time in care) were used. Group-based trajectory analysis was conducted to identify groups with distinct cost trajectories and to profile the individuals in these groups. The association between individual-level predictors and the probabilities of group membership was further examined through multinomial logistic regression.

Results: Four distinct trajectories in foster care costs were identified; initially high costs, consistently high costs, moderate costs, and consistently low costs groups. Initially high costs group represented foster children who received high foster care payments for their first 6 months and then whose payments decreased. They were more likely to be 5 years old or younger when they are first placed in foster care, and physically abused before entering foster care. They are also more likely to experience frequent placement moves for their first 6 months in foster care. Consistently high costs group was those who consistently received high foster care payments over time. They were more likely to be 6 years old or older and have severe problems with health and/or mental health. Moderate costs group was characterized as those who were more likely to be placed in non-family settings such as group homes. Consistently low costs group was those who were more likely to be neglected before foster care placement and then placed in family setting and experienced less than 3 placement moves.

Conclusions and Implications: Age at entry, disability, prior maltreatment history, and placement pattern including the type and the number of placements were found to significantly affect foster care costs. To meet the goals of child welfare services as much as possible within their constrained budgets, it is necessary to develop a comprehensive framework for accurately assessing the costs and benefits of services for children and families involved in child welfare. A well-done cost study will provide a foundation for further examination and exploration of factors that may be related to improving the experiences of children served and strengthening a state's performance on the aggregate child welfare outcomes.