Understanding Adoption Subsidies: An Analysis of AFCARS Data. Summary and Conclusions


Subsidies have become an essential tool in moving children to permanent homes and supporting adoptive families. At the national level, subsidy practice shows some clear patterns in relation to characteristics of adopted children and adoptive families. However, the variations among states are equally striking. Although some extreme values may result from incomplete data provided to the AFCARS system, the state-level tables in the Appendix suggest divergent practice among states in most aspects of adoption subsidy practice. The following key findings represent both national patterns and variations among states:

  • Nearly all children adopted from foster care in recent years received an adoption subsidy. Nationally, 88 percent of children adopted in FY 2001 received an adoption subsidy. However, practice varied widely among states, with subsidy receipt ranging from 13 percent to 100 percent. Nearly all adopted children (88 percent) were identified as having special needs that would prevent adoption without financial assistance.
  • Nationally, the median monthly adoption subsidy was $444 per month. This figure represents a 10-percent increase between FY 1999 and FY 2001. Across states, median subsidy varied widely_from $171 to $876 monthly. Although states have the option of offering deferred payment agreements, which allow families the option of negotiating a subsidy at a later date even if they do not need one at the time of adoption, this arrangement is not explicitly identified by AFCARS data. Fewer than 1 percent of adopted children were shown as having an adoption assistance agreement and receiving a subsidy of $0 or $1.
  • Federal adoption assistance through Title IV-E is widely used, representing 84 percent of all adoption subsidies nationally. Analysis of aggregate data found that states that identified larger percentages of children as IV-E eligible provided subsidies to more children. Multivariate analyses found associations between IV-E eligibility and both subsidy receipt and amount. States with higher levels of federal matching (FMAP) for IV-E adoption assistance offered lower subsidy amounts, suggesting that even augmented federal support does not offset limited financial resources within these states.
  • Children's age and special needs status influenced subsidy receipt and amount. Older children were more likely to receive subsidies, and to receive larger subsidies. Race and ethnicity did not influence subsidies, after controlling for state-level variation. Although sex was not associated with subsidy receipt, among children who received a subsidy, boys received slightly higher subsidies than did girls.
  • Pre-adoptive relationship and other characteristics of adoptive families influenced children's subsidies. Children adopted by foster parents  who represent more than half of all adoptions  were more likely to receive subsidies than others. They also received higher subsidies than children adopted by relatives. Children adopted by Hispanic mothers received lower subsidies than those whose adoptive mothers were non-Hispanic whites. Children adopted by single females received higher subsidies than those adopted by married couples. These findings suggest the influence of both family needs and adoptive parents' ability to advocate on subsidy decisions.
  • Analyses found some support for associations between subsidies and adoption outcomes. Analysis of state-level aggregate data show a significant positive correlation between the percentage of adopted children who receive a subsidy and the percent of eligible children who are adopted. Multivariate analysis found that children living in states where the median time to adoption was longer were more likely to receive subsidies, and received higher subsidies. Possibly states are using subsidies strategically to address the backlog of waiting children in foster care and meet their adoption goals.

The limitations of the AFCARS data set suggest that more compelling analyses may be found within state administrative databases, with greater opportunities to compare children's foster care and adoption experiences. However, the comprehensive scope of AFCARS supports analyses that provide an overview of how subsidies are used to support permanency for children who might otherwise remain in foster care, as well as the diversity of practice among states.

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