Date Approved

2026

Degree Type

Open Access Senior Honors Thesis

Department or School

Economics

First Advisor

Jenni Putz, Ph.D.

Second Advisor

Amanda Stype, Ph.D.

Third Advisor

Barbara Patrick, Ph.D.

Abstract

This paper evaluates the impact of Michigan’s 2014 Public Act 308 on foster care adoption outcomes. By converting traditional adoption subsidies into dynamic, redeterminable contracts, the policy aimed to reduce the financial uncertainty associated with adopting children with latent or evolving special needs. Using data from the Adoption and Foster Care Analysis and Reporting System (AFCARS) from 2000 to 2022, we implement a generalized synthetic control method to account for unobserved time-varying heterogeneity. We find that the policy had no statistically significant impact on the aggregate adoption rate. However, it generated significant gains within targeted subpopulations, increasing the probability of adoption by 29.9 percentage points for children with intellectual disabilities, 19.7 percentage points for children with other complex medical conditions, and 15.0 percentage points for children with clinical disabilities. We observe no significant treatment effect for physical disabilities, which are generally more predictable than latent conditions. These estimates suggest that adjustable adoption subsidies are a highly effective method for improving adoption rates among vulnerable foster care populations. 1

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