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The effect of lowering welfare payment ceilings on children's risk of out-of-home placement

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  • Wildeman, Christopher
  • Fallesen, Peter
Abstract
Although much research considers the relationship between family income and child maltreatment, contact with child protective services (CPS), and out-of-home placement, little research provides a strong causal test of these different relationships. And, as such, it remains unclear how increasing or decreasing the generosity of social welfare programs could affect children's risk of experiencing maltreatment, CPS contact, and out-of-home placement. In this article, we use Danish registry data and a 2004 policy shock to estimate the effect of a substantial decrease in welfare generosity—a monthly reduction in disposable income of 30% for those who were on a specific form of welfare for six consecutive months or more—on children's risk of out-of-home placement. Our results indicate that this decrease in welfare generosity increased children's risk of out-of-home placement by about 1.5 percentage points in any given year, representing an increase of about 25% in the annual risk of out-of-home placement. The results also indicate that in a similar group of welfare-dependent individuals who were not affected by the policy shock, there is only a negligible increase in the risk of out-of-home placement, further buttressing the case for causal effects. Taken together, this article shows that substantial changes in the economic conditions of the poorest families can have a substantial effect on the probability that their children will be placed in out-of-home care.

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  • Wildeman, Christopher & Fallesen, Peter, 2017. "The effect of lowering welfare payment ceilings on children's risk of out-of-home placement," Children and Youth Services Review, Elsevier, vol. 72(C), pages 82-90.
    • Handle: RePEc:eee:cysrev:v:72:y:2017:i:c:p:82-90
    DOI: 10.1016/j.childyouth.2016.10.017
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    Cited by:

    1. Wood, S. & Scourfield, J. & Stabler, L. & Addis, S. & Wilkins, D. & Forrester, D. & Brand, S.L., 2022. "How might changes to family income affect the likelihood of children being in out-of-home care? Evidence from a realist and qualitative rapid evidence assessment of interventions," Children and Youth Services Review, Elsevier, vol. 143(C).
    2. Yi, Youngmin & Edwards, Frank & Emanuel, Natalia & Lee, Hedwig & Leventhal, John M. & Waldfogel, Jane & Wildeman, Christopher, 2023. "State-level variation in the cumulative prevalence of child welfare system contact, 2015–2019," Children and Youth Services Review, Elsevier, vol. 147(C).

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