SUPPORTING YOUTH TRANSITIONING OUT OF FOSTER CARE TO ADULTHOOD: HOW PLACEMENT TYPE IMPACTS FINANCIAL CAPABILITY

Sara Stuart Spiers

doi:10.7273/000007474

Financial capability refers to the knowledge, skills, and access to manage financial resources effectively. It includes both financial knowledge and skills to guide financial decision making and the access to financial services to practice and apply skills. These skills are essential for emerging adults as they begin to navigate adulthood and think about postsecondary opportunities and employment. Yet, not all emerging adults have the same chance to learn financial capability skills. This study looks at how foster care placement types, congregate care or family-based, influences the development of financial capability of youth with foster care experience. The research questions are: Is spending time in congregate care negatively associated with the development of financial capability in emerging adulthood (18-21)?” And “does achieving financial capability in emerging adulthood lead to positive transitional outcomes (i.e., educational attainment, employment) in early adulthood (22-26)?” To answer these questions, the study uses a secondary dataset from the Opportunity Passport Program, which is a program that specifically helps youth with foster care experience learn how to manage money. Financial capability is measured by using four core concepts - “earn,” “spend,” “save and invest,” and “borrow.” Regression models with each core concept an outcome variable also controlled for three demographic variables (gender, race, and sexual orientation). Congregate care was statistically significantly associated with the core concepts of “spend” and “save and invest.” Emerging adults with congregate care experience were less likely to have a checking account and more likely to fall into the “no account, no savings” Additionally, findings suggest that the development of strong financial capability concepts “spend” and “save and invest” during emerging adulthood were statistically significantly associated with postsecondary outcomes while “earn,” “spend,” and “yes account, no savings” were statistically significantly associated with employment. These findings should be used to continue to inform child welfare financial capability policy and program efforts to close the gap of financial capability outcomes between youth with foster care experience and non-foster youth peers.

SUPPORTING YOUTH TRANSITIONING OUT OF FOSTER CARE TO ADULTHOOD: HOW PLACEMENT TYPE IMPACTS FINANCIAL CAPABILITY

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