The effect of aftercare on human capital acquisition among foster care alumni

Most countries provide aftercare for foster care alumni either through specific targeted programs or by making foster care or related services available to the youth after they have aged out of foster care. Yet we have limited evidence of the effects of this type of care, especially from non-US contexts. My study tests whether an expansion of the Danish aftercare scheme in 2001 affects later outcomes of foster care alumni. This expansion raised the age limit for eligibility for aftercare from 20 years to 22 years, and created an increased focus on availability of this type of support. Using Danish administrative data and a difference-in-difference setup, I find that the expansion increased unemployment, but only in the short run, and reduced educational activities overall. It did, however improve wage outcomes, but only for those cohorts immediately impacted by the reform, and only in the medium run.