This is something I know very little about, so Bald and others. (2022) The NBER working paper is an interesting read. They describe the key stress of foster care: failing to put foster children at risk can expose them to abuse or neglect; however, putting too many at-risk children into foster care can lead to family disintegration. Some interesting excerpts follow:

• Prevalence/incidence: “5% of U.S. children are in foster care at some point during childhood, and other countries have similar rates…. 2019 [Child Protective Services] CPS surveyed nearly 3.5 million children who were abused (nearly 5% of all children) and classified approximately 652,000 children as victims (nearly 1% of all children)…37% of children experienced child welfare surveys , 12% of children were surveyed on child welfare. Children identified as victims of abuse, including 18% of Black children and 16% of Native American children”
• “Orphan Train”: “At the turn of the century, the ‘Orphan Train’ transported thousands of neglected children from cities to farms to live and work”
• high incidence of depression. “Children in foster care had seven times higher rates of depression and anxiety compared to similar children who did not spend time in foster care”
• imprisonment. “Nearly 20% of the U.S. Prison Population in Foster Care as a Teenager”
• Employment outcomes. “Those who were in foster care over the age of 18 reported a 50 percent reduction in income and employment, and by age 26, as many as a third were homeless compared to a sample of young adults with similar education levels. returnable”
• Foster care costs. “Child welfare agencies currently spend more than $30 billion a year on child protection, about half of which is funded by the federal government… The average monthly foster care cost is just over $500, double the average TA benefit for needy families”
• racial differences. “Racial disparities emerge at nearly every point of foster care decision. Black children are reported to child protective services more frequently than white children, and reports involving black children are more likely to be identified as abuse” Cumulative foster care rate for blacks 10% -12%, cumulative foster care rate of 11-15% for American Indian/Alaska Native children compared to 5% for white children.
• geographic differences. New Jersey, Utah and Virginia had the lowest rates of less than 3 per 1,000 children, while West Virginia, Montana and Alaska had more than 15 per 1,000 children.
• risk factor: These are fairly obvious: poverty, substance abuse (especially opioid abuse in recent years).
• performance-based contracts. Some states are trying to tie the child’s outcome to the cost of foster care. A key question is, will this motivate foster families to try to avoid the most at-risk children?

Foster care trends