Employment Equity: Transition-Age Youth with Experience In Foster Care during an Economic Crisis

Background and Purpose:

Economic crises have unequal impact for individuals in the labor force. Specifically, young adults entering the workforce experienced substantial job loss during the 2008 Great Recession. Part of this already vulnerable population, transition-age youth with experience in foster care (TAYFC) are less likely to be employed and have lower earnings, on average, than peers without experience in foster care. Given that early career disruptions can have long-term implications for earnings and career trajectories, there is a need to understand employment patterns among TAYFC following major economic changes. The current study leverages linked administrative data to examine employment in young adulthood spanning the Great Recession among cohorts of TAYFC who lived in out-of-home care in late adolescence.

Methods:

This study utilized administrative data from three data sources. First, California’s Child Welfare Services/Case Management System (CWS/CMS) identified TAY with a history of out-of-home placement between ages 16 and 17. Next, these records were linked to quarterly wage data from the California Employment Development Department (EDD) to show employment outcomes. To document point-in-time postsecondary enrollment status, records were then matched to National Student Clearinghouse (NSC) data. Demographic and child welfare characteristics were drawn from structured CWS/CMS fields. The final sample included between 35,223 and 43,680 TAYFC annually.

Generalized linear models were estimated to assess differences in the likelihood of employment. Risk ratios (RRs) were estimated for cohorts observed prior to the Great Recession (2007) and during its trough (2011). Differences between cohorts were assessed using interaction terms between cohort and covariates. The 2007 (pre-Recession) cohort served as the reference group.

Results:

Point-in-time estimates show that employment among TAYFC aged 18-22 decreased during the Great Recession, from 30.2% in 2007 to 19.7% in 2011. Across cohorts, TAYFC who were older, were enrolled in college, or who had been employed as a minor were significantly more likely than their counterparts to be employed, suggesting that early opportunities and access to educational pathways have advantages. In contrast, TAYFC who were Black (vs. Latine), had behavioral health conditions, and experienced probation supervised foster care had consistently lower rates of employment, and these disparities widened over the recession. These patterns point to inequities in employment opportunities. Prior employment during adolescence emerged as the strongest predictor of later employment. Young people who were employed between ages 16 and 17 were more than three times as likely to be employed between ages 18 and 22, and employment as a minor remained highly protective during the recession.

Conclusions and Implications:

Findings indicate that unemployment increases substantially among TAYFC during periods of economic crisis and there are inequitable impacts for specific subgroups. These results highlight the importance of targeted, inclusive workforce supports to ensure all young people have access to employment opportunities, especially during economic downturns. Expanding access to early, developmentally appropriate employment opportunities for adolescents may be an effective way to improve employment outcomes and reduce disparities, and such opportunities may have lasting effects.