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Abstract:More than 400,000 children in the United States are currently in foster care, many of whom are at risk for long-lasting emotional and health problems. The Adoption Assistance and Child Welfare Act of 1980 provided federal funds for monthly adoption subsidies designed to promote adoptions of special-needs children and children in foster care. Using data from the Adoption and Foster Care Analysis and Reporting Systems, I find that the number of adoptions increases when children become subsidy-eligible, and that most of the increase is from adoptions by foster parents. Conditional on adoption, subsidy eligibility decreases time spent in foster care.
