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PARENTAL SUBSTANCE USE AND FOSTER CARE: EVIDENCE FROM TWO METHAMPHETAMINE SUPPLY SHOCKS

Authors

  • SCOTT CUNNINGHAM,

    1. Cunningham: Assistant Professor, Department of Economics, Baylor University, Waco, TX 76798. Phone 254-710-4753, Fax 254-710-6142, E-mail Scott_Cunningham@Baylor.edu
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  • KEITH FINLAY

    1. Finlay: Assistant Professor, Department of Economics, Tulane University, New Orleans, LA 70118. Phone 504-862-8345, Fax 504-865-5869, E-mail kfinlay@gmail.com
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    • This paper is based on earlier work with Greg Rafert, and we are grateful for his help. The authors wish to thank the Drug Enforcement Agency, the Department of Health and Human Services, and the Substance Abuse and Mental Health Services Administration for providing data. This paper has benefited from the comments of Joseph Doyle, Melanie Guldi, Todd Kendall, Sam Peltzman, Dan Rees, seminar participants at Baylor University and the Southern Economic Association Meetings, the Co-Editor, and two anonymous referees.


Abstract

Foster care caseloads have nearly doubled over the last three decades. Parental methamphetamine (meth) use grew significantly during the same period. While child welfare workers and law enforcement claim that parental meth use contributes to foster care growth, the evidence for a causal effect has not been determined. This paper presents the first evidence of a causal effect of meth on foster care admissions using two exogenous supply-side interventions in meth markets from the late 1990s for identification. First, we find that restrictions on meth precursor distribution caused meth use (proxied by white meth self-referred treatment cases) to decline 4.1%. Second, using two-stage least squares, we estimate a positive elasticity of foster care cases with respect to meth use of 1.54. We also estimate elasticities of 1.03 and 1.49 for cases of child neglect and parental abuse, respectively. These results suggest that child welfare policies should be designed specifically for the children of meth-using parents. (JEL I12, J13, K42)

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