Does Education Pay for Former Foster Care Youth? Results From Waves 4 and 5 of the Midwest Study

Purpose: Establishing financial independence is an exigent and daunting task for youth that age out of foster care.  Among the general population of young adults, educational attainment has a profound impact on later employment outcomes (U.S. Bureau of Labor Statistics, 2013).  Climbing the education ladder predicts higher earnings and lower unemployment, as well as better health and greater life satisfaction (Cutler & Lleras-Muney, 2006).  Although the connection has been extensively studied in the general population, we know less about the extent to which this link holds for the vulnerable population of older youth in foster care (Hook and Courtney, 2011; Salazar, 2013).  Results from this study explore the magnitude of educational attainment on later earnings and employment among young adults formerly in state care.

Methods:The study draws on data from Wave 4 (n=602) and Wave 5 (n=596) of the Midwest Evaluation of the Adult Functioning of Former Foster Youth (Midwest Study), when respondents were 23/24 and 26 years old, respectively.  Annual earnings and unemployment rates are examined across five levels of educational attainment: no high school degree, GED, high school diploma, some college, and college degree.  Logistic regression is used to evaluate the likelihood of being employed based on educational attainment, and a second regression analysis examines the expected increase in log earnings by level of education.  Both models control for a host of demographic, foster care involvement, education, and mental health factors.

 

Results:  Respondents with higher levels of education at age 24 show marked differences in annual earnings and employment rates by age 26.  Those with less than a high school degree and a GED display the lowest earnings ($6,439 and $8,851) and employment rates (.30 and .39).  A high school diploma ($9,705 and .46), some college ($16,263 and .59) and a college degree ($28,155 and .79) yield sequentially improved outcomes.  Some college and a college degree predict greater odds of being employed compared to having no high school degree (3.5 and 5.7 greater odds, respectively; p≤.001), but a diploma and GED did not predict significant differences.  For annual income, a high school diploma (76% greater earnings, p≤.01), some college (1.58 times greater earnings, p≤.001), and a college degree (3.9 times greater earnings, p≤.001) predict greater earnings than no high school degree.

Implications: After controlling for a host of factors, level of education had demonstrable effects on employment and earnings.  The impact is especially large for respondents that had completed a two-year or four-year college degree by age 24.  It may be the case that a postsecondary degree created an extra buffer from the Great Recession, which was underway during Wave 5.  Even in a vibrant economy, timely educational completion is especially acute for youth aging out of care, who must transition to self-sufficiency at an younger age and often with less family support than most youth.  Findings from this study underscore the importance of sound policies and programs that promote timely educational attainment, such as extending foster care to age 21 (Hook & Courtney, 2011).