No Child Left Behind in Foster Care.

• Author: Meehan, Brian

In the United States, excess demand exists for adopting healthy babies, while an excess supply exists of older children or children with physical or emotional disabilities. Nationally, 5 percent of older children age out of the foster-care system without being adopted (Lucile Packard Foundation 2020). Children awaiting adoption who remain in foster care for long periods or incur changes in foster-care placements often experience life-long poverty, educational failure, homelessness, criminal behavior, substance abuse, and mental health problems (Fawley-King et al. 2017; Gypen et al. 2017). Nearly 18 percent of youth who age out of foster care become homeless within seventeen months after they leave care, and 70 percent of all California penintentiary inmates have spent time in foster care (Baccara et al. 2014). Channary Khun, Sajal Lehiri, and Sokchea Lim (2020) analyzed federal and state government spending and concluded that the primary stated objective of government adoption agencies is to achieve the permanency of adoption over foster care. Further, using a survey of adopting parents in 2007, Khun, Lehiri, and Lim (2020) estimated that a monthly subsidy of $735 was necessary to shift interested parents from international to domestic adoptions and an additional $506 to shift from domestic private-care to foster-care children. This paper suggests that introducing a market for the right to raise children could increase resources available for the hard-to-adopt children, improve the efficiency of resource allocation by government, speed up the adoption process following court approval, and improve the welfare of the adopted children and their adopting parents.

Children awaiting adoption numbered 123,754 in 2017, up from 106,636 in 2014. The total number of unrelated (nonfamily) adoptions during 2014 was 75,337, of whom 61 percent were placed through public agencies, 29 percent through private agencies and individuals, and 8 percent from outside the United States (National Council for Adoption 2017; U.S. Department of Health and Human Services [DHHS] 2019). In 2014, (1) the total number of infants adopted was 18,329 (Creating a Family 2020). During 2018, infants made up 5 percent of adoptions from foster care; the mean age of adoption was 6.2 years, while the median was 5.1 years. The mean time elapsed from termination of parental rights to adoption was 12 months, while the median time was 8.7 months (U.S. DHHS 2019). The number of foster-care children who aged out in 2014 was 22,392, or 9 percent of the total children discharged (Batista, Johnson, and Baach Friedmann 2018). Adoptions from abroad have declined over time. For example, 5,647 children were adopted from abroad in 2015, representing a decline of 75 percent from 2004 (Elleseff 2017). These statistics suggest that the largest source of adoption is foster care. Demand was high for the 18,392 infants adopted nationwide in 2014. Estimates show that for every baby adopted, thirty-six families are waiting to adopt a baby (Institute of Family Studies 2019). However, for the 57,008 older and special-needs children, adoption demand is much lower. Adoption would be crucial for improving the prospects of the children who may eventually age out from foster care (22,392 in 2014, as cited earlier) because these individuals will struggle to obtain success in society and will tend to generate significant social costs after they age out. The first section in this paper describes the existing process of adoption from foster care and the other sources of adoption. Next we present our market-oriented proposal and then evaluate the proposal vis-a-vis the existing practices. After this, we consider existing legal and ethical impediments to the implementation of the proposal, before drawing conclusions.

An Overview of Existing Adoption Procedures

Children in foster care become eligible for adoption when the court terminates parental rights. The mean time from this termination of parental rights to adoption was 17.4 months in 2018, and the median was 9.0 months, indicating that it took a considerable time for the adoption process to be completed for some children (U.S. DHHS 2019). Some children wait many years, and if a child is not adopted by the age of nine, the probability that he will not be adopted is higher than the probability that he will be (Herrmann 2010).

Prospective adopting parents are screened for suitability by social workers at both foster-care agencies and private adoption agencies. These social workers are typically employees of their state department of public welfare or the private adoption agencies. After initial screening, prospective adopting parents enter an authorized pool and are normally required to complete a thirty-hour education course. They state their preferences for a desired child or a specific available child. The length of the adoption process depends on the parent's preferences for the adopting child and the matching conditions as determined by the social workers. Adopting a baby usually requires waiting two to seven years, whereas adopting an older child takes only six to eighteen months (National Adoption Foundation 2020). This indicates an excess demand for babies. A detailed survey of adopting parents (Baccara et al. 2014) revealed that they would switch from a Caucasian or Hispanic child to an African American child for a $36,500 payment and from a girl to a boy for $18,300. In that surveyed group, a $10,000 increase, or about a 33 percent rise in the costs of adoption, decreases the probability of potential adopters' applications by only 1.9 percent, indicating inelastic demand for adoptions. It also suggests that a rise in potential adoption revenues would occur with higher prices charged for those adoptions. Again, there is substantial demand for healthy babies, while an excess supply exists of older children or children with physical or emotional disabilities (Deutsch et al. 2017).

The U.S. Department of Health and Human Services provides subsidies for adopting parents, but the subsidies can be no more than foster-care payments for children with special needs. The category of special needs is defined by each state. The federal government subsidizes adoptions when a child is classified by a state as having special needs. (2) Not surprisingly, in 2018, probably to obtain the federal subsidies for adopting parents, 93 percent of adopted children were classified as having special needs. Indeed, subsidies appear to significantly contribute to adoptions (Hansen 2007; Deutsch et al. 2017). Subsidies that reduce aging out from foster care save taxpayers $143,000 in direct costs of maintaining children in adopting homes rather than in foster care. In addition, there are savings of $190,000 to $235,000 in other costs, such as special education and involvement in the criminal justice system, as well as between $88,000 and $150,000 in the extra lifetime income of those adopted (Kamarck et al. 2012).

The price for adoption through domestic private agencies ranges between $5,000 and $50,000 (Adopt US Kids n.d.). Independent adoption through an attorney ranges between $8,000 and $40,000. The average cost of adopting from foster care is modest, $2,744 (American Adoptions 2020), and even the required home study can be subsidized (National Adoption Foundation 2020). The cost of adoption from other countries by U.S. citizens ranges between $20,000 and $50,000, plus travel and accommodations estimated at $10,000 (Snider 2020). Any adoption facilitator is permitted to pay specified living and medical expenses for the birth mother and hospital expenses for her and the baby. Under state laws, selling a child is illegal. Under federal law, selling of minors is punishable by imprisonment for not less than thirty years and often includes fines (Legal Information Institute n.d.). Presumably, the intent of the law is that the birth mother is not supposed to profit from delivering a child, which is considered illegal "baby selling," and the ban on this process is strictly enforced. In five states, even living expenses for the birth mother are not allowed when a child is adopted. In a case in Texas in 1994, for example, criminal charges were imposed on the birth mother for selling five of her children to her lawyer for $12,000; the defendants attempted to claim that the money received was for the children's living expenses, but the court ruled that as illegal (Carroll 2011).

Elizabeth Landes and Richard Posner state in their path-breaking article "The Economics of the Baby Shortage" (1978) that a black market exists for babies and suggest the introduction of a legal market, which would reduce baby prices, reduce the baby shortage, and eliminate the black market. They implicitly suggest that because of this legitimizing of the market, importation of adoptable children should decline as U.S. market prices for babies decline. More recently, Jason Brennan (2015) has suggested the legalization of the black market for babies. The mothers rather than the adoption facilitators would then enjoy the revenues. The existing high penalties for market transactions for children may have reduced the black market but have not eliminated it. (3) Existing U.S. adoption laws that prohibit market pricing for the various types of children without a permanent home creates a shortage of preferred groups of children and an excess supply of other children. (4) Creating free markets leads to the reduction in avoidable social costs incurred as a results of domestic...