The Economics of Child Adoption

Abstract

Half a million children linger in foster care every year over the last decade (AFCARS, 2006). Adoption from foster care and having a consistent family is recognized as a better outcome for a child. In the United States demand for adoptive children has consistently exceeded their supply. Despite this excess demand there are more than 125,000 children waiting to be adopted in foster care every year. The magnitude of the number of children in foster care is therefore troubling and unexplained. Yet, economists have given little attention to studying the issues in child adoption. In this study I attempt to comprehensively examine the impact of changing trends in international and independent adoptions, live births from assisted reproductive technology on the adoption outcomes of children from foster care. I show that international adoptions, independent adoptions and assisted reproductive technology affect the adoption outcomes of children in foster care adversely.