Examining the Impact of State Extended Foster Care Policies on Rates of Youth Homelessness

Background and Purpose: Prior research shows that extending the age of foster care eligibility beyond the age of 18 is associated with decreased risk of homelessness among youth exiting foster care. Drawing on this finding and related evidence about the benefits of extended foster care, the Fostering Connections to Success and Increasing Adoptions Act of 2008 gave states the option to use federal funds to implement extended foster care. In the intervening years, most states have extended foster care eligibility beyond age 18, but we lack evidence about the impact of such policy changes on rates of homelessness among youth. To address this gap, we construct a novel, longitudinal dataset and employ a quasi-experimental, difference-in-difference approach to estimate the impact of extended foster care policies on rates homelessness among youth age 18-24.

Methods: We combine data from the U.S. Department of Housing and Urban Development’s annual Point-in-Time estimates of homelessness, the U.S. Census Bureau’s American Community Survey and publicly available data on the timing of state policy changes to extend the age of foster care eligibility beyond age 18 to construct a novel panel dataset that allows us to track changes in extended foster care policies, rates of homelessness among youth ages 18-24 and housing market/economic factors for all states for the the period from 2013-2020. We employ a difference-in-difference approach using a series of two-way fixed effects regression models to estimate the effect of changes in state policies to extend foster care eligibility beyond the age of 18 on measures of the total, sheltered and unsheltered rates of homelessness among youth ages 18-24 while controlling for time-varying housing market and economic factors. Put differently, our analysis estimates the impact of extending the age of foster care eligibility by comparing the pre- and post-implementation differences in these outcomes for states that did enact a policy change to extend foster care against that states that did not.

Results: We find consistent negative associations between the implementation of policy to extend the age of foster care eligibility beyond the age of 18 and rates of youth homelessness. Specifically, our models provide evidence of an expected lagged effect wherein a policy change to extend foster care is associated with decreases in measures of rates of youth homelessness captured in the year after the implementation of a policy change. Our models also suggest that the impact of policy changes are most evident on rates of homelessness among youth 18-24 who are homeless as individuals, as opposed to members of a family with children.

Conclusions and Implications: Our findings provide evidence that policies extending the age of foster care eligibility beyond age 18 are linked with reductions in rates of youth homelessness. As our outcome measures include all youth18-24 who are homeless, the expected impact of such policy changes specifically on rates of homelessness among former foster youth is likely to be even more pronounced than our results suggest.