P5

Effects of placements in outside home care on children’s health and education

Signe Frederiksen
Aarhus School of Business, Denmark

By the end of 2006 14,276 children and adolescents (age 0-18) were placed outside home in Denmark and 11.3 billion was spent, yet we know little about the effects of outside home placements. This paper adds to the scant knowledge in this area by estimating the effects of placements in outside home care on children’s short-run and longer-run health and educational outcomes in a Danish setting using propensity score matching. In Denmark very rich panel data exist on the whole population on a range of parameters: demographics, socioeconomics, health etc., therefore, the population of children placed in outside home care is present in the registers. Using these unique data it is possible to study the rare events of being placed in outside home care. This paper focuses on health and educational outcomes of all children who were born in Denmark in the period 1980-2006 and who have been placed for the first time in outside home care. Furthermore it is possible to link the children to their parents and thereby enhance the model to include the intergenerational transmission mechanisms. Children placed in outside home care are a highly selected group and therefore it is difficult to find a suitable control group. Propensity score matching is used to overcome the selection bias embedded in the study population when estimating the counterfactual health outcomes of children placed in outside home care if they had not been placed in outside home care.

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