Economic Instability and Child Protective Services Involvement: Evidence from State Administrative Data

Background:

Economic life is quite fluid for contemporary American families, as earnings or social benefits tend to fluctuate between or within years. Such economic turbulence may exacerbate inequity across groups, which impacts children who grow up in these families. In turn, some children may suffer from impaired family functioning. While a body of research does document how low-income level impacts child maltreatment reports, we know little about the effects of intra-family economic instability on risk of child maltreatment, and particularly about the timing of economic shocks and its relation to a family’s subsequent involvement with the child protection system (CPS). Further, despite a well-documented link between family hardships and CPS involvement, there is a critical need to understand how social programs could buffer the financial hardships imposed by economic shocks within CPS-involved population.

Methods:

Using quarterly administrative records from late 2012 to 2016 among a sample of families (N=2,429; person-quarter observations=24,901) at risk of CPS involvement participating in a randomized control trial conducted in Milwaukee, Wisconsin, this paper employs event history analyses to study how economic instability—measured through (1) wage shock (earnings drop by 30 percent or more from one quarter to the next); (2) wage shock, but simultaneously with or without income supplemented by cash and in-kind systems; and (3) the number of consecutive quarters without a wage reduction—affects a family’s subsequent CPS event.

With the administrative records on quarterly earnings, welfare receipt, and the dates of CPS investigations, this study treats a family’s first occurrence of each CPS outcomes (investigation report, physical abuse report, and neglect report) as the event, and the analysis time is each quarter. Cash transfers include TANF, SSI, UI and child support; in-kind benefits include SNAP and child care subsidy. Cox proportional hazards models are used to separately estimate the effects of the three aforementioned work indicators in predicting the subsequent CPS investigation, with inclusion of demographic characteristics, whether each family had an indicated report prior to baseline, etc.

Results:

Preliminary results indicate that formal earnings drop without income supplementation from cash or in-kind benefits is significantly associated with a subsequent investigation report. Specifically, experiencing a wage shock that could not be offset by benefits is estimated to increase the rates of having a neglect report by approximately 28 percent and having a physical abuse report by 44 percent (p<.05). The rate of having a subsequent CPS report decreases by approximately 6 percent for one additional consecutive quarter with no wage shock, net of all covariates (p< .001).

Conclusions and Implications:

The general pattern of the results is suggestive of a strong link between economic stability and CPS involvement. Of equal importance, it provides evidence of the crucial role that social programs play in buffering the financial hardships among CPS-involved families. Income support programs may reduce maltreatment and CPS involvement. With the buffering effects observed, continued support from safety net programs ought to be strengthened to help families with children cope with economic risk.