Parental Substance Abuse and Foster Care: Evidence from Two Methamphetamine Supply Shocks

Foster care caseloads have almost doubled over the last two decades, but the cause of the growth is poorly understood. We study the role of parental methamphetamine (meth) use, which social workers have linked to recent growth in foster care admissions. To mitigate the impact of omitted variable bias, we take advantage of two significant, exogenous supply-side interventions in meth markets in 1995 and 1997, and find robust evidence that meth use has caused growth in foster care caseloads. Further, we identify the mechanisms by which increased meth use caused an increase in foster care caseloads. First, we find that treatment for meth abuse caused foster caseloads to fall in situations where a child was removed because of parental incarceration, suggesting that substance abuse treatment is a substitute for foster care services and more generally an effective demand-side intervention. Secondly, we find that parental meth use causes an increase in both child abuse and child neglect foster care cases. These results suggest that child welfare policies should be designed specifically for the children of meth-using parents.