Does education pay for youth formerly in foster care? Comparison of employment outcomes with a national sample

Each year tens of millions of federal dollars are invested to promote secondary and postsecondary educational attainment among older youth in foster care. Despite the presumption that this is a sound investment, as indicated by copious research from studies of the general U.S. population, research examining the payoff among youth transitioning to adulthood from state care has been sparse. In the present study, we analyze the relationship between educational attainment and employment outcomes among youth exiting care. Drawing on data from a large, multi-state study of youth transitioning from foster care, findings indicate that increased education, and particularly degree completion, is associated with greater earnings and lower employment rates. Compared to young adults matched on educational attainment from a nationally representative study, youth formerly in foster care earn about half and the employment rate is 20 points lower. However, increased levels of education have larger benefits for youth who exited care than youth from the general population, and at higher levels of attainment the two groups have similar employment rates and earnings gaps become less pronounced. Among youth formerly in care, results from regression analyses indicate that, compared to individuals with no high school credential, a GED or certificate of completion predicts no benefits in earnings or likelihood of being employed; a diploma predicts an earnings benefit; and some college, a two-year degree, and a four-year degree or greater predict large benefits in earnings and likelihood of employment. We conclude by briefly discussing implications for policy, practice, and future research.