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Adoption Subsidies as an Affordable Option

Subsidies Cost Less

The idea of making the adoption of children in foster care who have special needs an affordable proposition for the average American-on-a-budget is a revolutionary idea, and one that research tells us is helping kids. Thousands have been adopted who otherwise would not have been. A bonus of the program, the icing on the cake, so to speak, is that it also saves tax dollars.

Foster care involves ongoing training, agency supervision, periodic case reviews and judicial hearings that make it more expensive than even fully-subsidized adoption. Once a child is adopted, there are no more court hearings and social workers make no more home visits. For all practical purposes, the case is closed, which eliminates the administrative costs associated with foster care.

Westat Study

A 1993 study by the Westat Corporation concluded "adoption assistance clearly represents a substantial savings over foster care." The Westat report estimated that "federal and state governments will save a total of approximately $1.6 billion in connection with a group of 40,700 children adopted with assistance during the 1983 to 1987 period." The savings did not include disparities between monthly foster care maintenance payments and adoption subsidy rates, but considered "only the differences in administrative costs between foster care and adoption assistance up to the time the children reach age 18 and would normally be discharged from foster care." (Sedlak and Broadhurst, 1993)

Societal Costs

In addition to the financial cost-savings of providing adoption subsidies compared to keeping a child in foster care, the study identified several societal benefits of limiting the number of moves a child made in out-of-home care. The study states, "The relative costs of foster care versus adoption cannot be considered solely in financial terms. There are other dimensions on which one would expect continued foster care to be more costly than adoption: the children's quality of life and their emotional, educational, and social outcomes."

Westat used a national study of children who were discharged from foster care into independent living programs as a comparison group. The study examined the number of moves a young person made compared to the incidence of certain outcomes. For instance, if a young lady made one move, the probability that she would become pregnant was 19 percent. But, if she moved ten times, there was a 60 percent chance of pregnancy. In terms of using illegal drugs, if a child moved one time, there was a 24 percent chance of using drugs, compared to a 82 percent chance if moved ten times. Similarly, if a young person moved once, the likelihood of being in jail or on welfare was 25 percent, compared to 75 percent if moved ten times. And, with regard to completing high school, the statistics were 78 percent if moved once and 38 percent if moved ten times.

These are powerful statistics when you consider the cost to society of keeping a person in jail or supporting someone on welfare. As the age-old saying goes, "pay now, or pay later."

Benefits to the Child

As we already know, adoption is a powerful thing for children. It changes their name. It provides lifelong stability. It allows a young child to know in no uncertain terms that "no one is coming to take me away." The emotional benefits that adoption provides is immeasurable in the life of a young person.

Therefore, taking into account the financial, societal, and individual benefits to a child makes a strong case for providing subsidy benefits to children with special needs.

Other Benefits

The Westat study did not address any additional long-term cost savings to the public, such as the "generational effect." By this, we mean the family of the adopted child makes use of far fewer services than the family of a foster child. For instance, the adoptive parents assume some responsibility for extraordinary expenses such as cars, college, weddings, graduate school, grandchildren, and the like.

Furthermore, adopted children, as other studies have shown, are far more likely to stay out of jail and to be productive taxpaying citizens than children who age out of the foster care system. This also saves money in the long term for the generation adopted, and for their children and grandchildren.


In general, providing adoption assistance payments for special needs children are of great value—to the child welfare system, to society in general, and to the adopted child. When the whole of these cost savings are taken into consideration, there is little question that adoption subsidy payments are beneficial in the short and long-term. As states across the country are struggling to balance their budgets, looking beyond the day-to-day financial realities and considering the tremendous cost savings of adoption subsidy should prove fruitful ten plus years down the road.

For More Information

Sedlak, Andrea J. and Diane D Broadhurst. Study of Adoption Assistance Impact and Outcomes: Final Report. Rockville, MD: Westat Corporation, 1993. See also, Cook, Ronna, et. al. A National Evaluation of Title IV-E Foster Care Independent Living Programs for Youth. Phase 2 Final Report. Rockville, MD: Westat Corporation, 1991. [Also published as ERIC document ED348599]

For more information on adoption subsidy, please contact the NACAC's Adoption Subsidy Resource Center at 800-470-6665, 651-644-3036, or e-mail at

NACAC appreciates the assistance of Dr. Rita Laws for contributing to this fact sheet.

North American Council on Adoptable Children (NACAC)
970 Raymond Avenue, Suite 106
St. Paul, MN 55114
phone: 651-644-3036
fax: 651-644-9848