Poverty, Race, and Human Capital: The Evolution of Our Nation’s Child Welfare System

An in-depth analysis of the United States’ Welfare System, its past and future.


Over the years, the American Child Welfare System has undergone significant changes that have shaped the lives of hundreds of thousands of children. Currently, the system seems to be at yet another turning point, one which may completely change the way in which vulnerable children are monitored and cared for. (Photo Credit: Phinehas Adams via Unsplash)

Raising children, at the risk of sounding trite, is one of the most revered and fundamental aspects of society. The value placed on bringing up the next generation leads one to wonder: what happens when children fall through the cracks, and how do we, as a society, care for them?

This question is something the United States has grappled with for centuries. Over time, the child welfare system, which cares for abused and neglected children, has evolved. 

The story of child welfare in the United States can be traced back to early orphanages, the majority of which were established by religious organizations. During the nation’s infancy, religious organizations played a more prominent societal role and, driven by their charitable values, were inclined to assume the responsibility of caring for vulnerable children. Inclinations aside, religious organizations also possessed the infrastructure and resources which allowed them to establish, but more importantly, maintain these orphanages. As a result, the traditional orphanage remained the hallmark of the child welfare system in America up until the early twentieth century.

Orphanages then fell into disfavor amidst growing concerns over the social, emotional, and intellectual development of children in the large, unregulated system. Following the Great Depression, that much-needed regulation would finally come. In 1935, the Social Security Act, for the first time, authorized federal grants for child welfare services. The influx of federal funds also came with much-needed regulations regarding the treatment of children. This legislative action provided unprecedented funding that served as the incentive for states to initiate comprehensive child welfare services. 

The next evolution of the child welfare system occurred in 1980 with the Adoption Assistance and Child Welfare Act (AACWA). This landmark piece of legislation established the idea that foster care should be a last resort and that states must make “reasonable efforts” to avoid removing children from their homes. Additionally, but perhaps most importantly, the act also reinforced the idea that states must prioritize family reunification. 

Subsequently, in 1997, these tenets were clarified by The Adoption and Safe Families Act (ASFA). Among other provisions, this act regulated the length of time children are allowed to remain in foster care, recognizing that long stays in the system are not in the best interest of children’s well-being. Out of this series of legislative measures, the modern child welfare system was born. 

Today, we stand at another major turning point in the history of American child welfare that calls into question the very foundations of the system. The system by which the government oversees the well-being of children is rather aptly named the “Child Welfare System.” However, this may be a slight misrepresentation of how the American system works in practice. 

“What we have now in America is really more of a child protection system as opposed to a child welfare system,” explains Fred Wulczyn, Ph.D., the Director of the Center for State Child Welfare Data at Chapin Hall, University of Chicago. “The use of the word “welfare” has a much broader connotation and would imply that the system looks at liabilities to the well-being of children that exist outside the parental sphere.”

There is no doubt that factors like the quality of education, healthcare, and social development impact the well-being of children, which begs the question: why are these factors not considered when assessing child welfare?

“Well, these causal influences that reside outside of the home are incredibly diverse and therefore very difficult to manage,” said Wulczyn. Moreover, the additional resources that a higher level of welfare management requires would necessitate a significant increase in investment from the federal, state, and local levels. 

Despite this, “New York City, along with a few other places in the U.S., seems to be positioning itself to reimagine the existing system,” said Wulczyn. 

“Currently our main goal is to expand primary prevention which is intended to limit family’s encounters with the foster care system, because we know how traumatizing it can be for families,” said Kathleen Brady -Stepien, Chief Executive Officer of the Council of Family and Child Caring Agencies (COFCCA). Primary prevention, which entails investment in unserved communities by way of schools, community centers, and healthcare options, seems to be the next logical step in a realistic transition to a true Child Welfare system. “By investing in communities more holistically, the goal of managing liabilities to child welfare outside the home becomes much more conceivable,” Wulczyn said.

The Federal Government seems to think so as well, judging by the slew of new laws and provisions passed in the last five years that aim to incentivize development in prevention services. The most notable of these laws is the Family First Prevention Services Act (FFPSA), signed into law in February 2018. In essence, the FFPSA awards federal grants to states as part of Title IV-E funding for prevention programs rather than foster care, ideally, limiting encounters with the foster care system. 

“While the goals of the act are laudable, these prevention programs in whatever form they take are then only accessible to individuals and families who are already candidates for foster care,” said Brady-Stepien. This means that programs funded by the act are only available for people already in contact with the system which in some respects is antithetical to the goal of primary prevention. 

Additionally, “in the case of the FFPSA, the most generous funding made available is for investments in ‘well-supported interventions’ and as of now only twelve exist,” said Wulczyn, which is insufficient and therefore, largely ineffectual. “That is the problem with most federal policy here in the U.S. It has only one view of the country that it attempts to manage which is just not possible, especially in a country as large and dynamic as America,” Wulczyn added. 

While flawed, the FFPSA does, according to Brady-Stepien, act as a “good first entry” for states with little prior investment in prevention services. “What I would like to see is even more investment further on the front end, which has the most potential to truly act as primary prevention, But right now ,I think we are pointed in the right direction,” said Brady-Stepien. 

Another objective tantamount to the transition to a system that truly addresses child welfare is addressing racial inequity within the system. This inequity can be seen in the extreme overrepresentation of specific groups within the system and the resulting disparities in outcomes. For black children and families in particular, stark disproportionality within the system is apparent in recent data provided in 2022 by the New York State Office of Children and Family Services (OCFS).

 According to OCFS, black people made up just 16% of the population in New York State, and yet represent 43% of the population in residential foster care. The report also revealed that a shocking 1 in 2 black children will be involved in a child protective services report (CPS) by the age of 18. 

Criticism of the child welfare system for these disparities is nothing new. In fact, a recent draft report of more than 50 Black and Hispanic frontline social service workers described it as a “predatory system that specifically targets Black and brown parents” and subjects them to “a different level of scrutiny.” Another cause for concern comes from a recent report from the New York Bar Association in tandem with the American Civil Liberties Union calling the New York City child welfare system a “system plagued by racism.” 

Especially in sensitive cases regarding race, it is important to remember that the “evidence of the cause is not evidence of the effect, the causes are often much more complex than how they are portrayed in popular media,” Wulczyn emphasized. That is to say, simply because the logical effects of the disparity are present does not necessarily mean the entire system is inherently racist. It is also absolutely crucial to keep this in mind when discussing who or what should ultimately be held accountable for the shortcomings of an institution like the child welfare system. 

As the previously mentioned data suggests, Black children are much more likely to be placed in foster care. This is a well-documented trend, and it would be easy to extrapolate from that and make broad-based claims about the whole child welfare system. What is not as easy to do is pinpoint what or who is exactly at fault. As a result, frontline workers typically bear the brunt of accusations of racism. 

This is not only extremely harmful and discouraging to workers, who are the backbone of the system but is also in most cases incorrect. Oftentimes, people will cite the disproportionate rate at which workers place black children into foster care following substantiated allegations of maltreatment as the basis of this accusation. At a moment’s glance, this seems to be a straightforward logical conclusion. However, the reason for this disproportionality, which is the source of much of the overrepresentation within the foster care system, has a different, more nuanced underlying cause — poverty. 

“In this country, historically speaking, it has been very difficult for minority communities to build wealth, and I think this trend is one of the side effects of that. It really does all come down to an issue of poverty and the lack of available resources associated with it. But it seems as though many are slow to realize that,” said Wulczyn. 

In response in part to the observed disparity among other accusations of racial bias, the foster care system has seen a huge rise in investment in anti-racist training for social workers, particularly in New York City. It would also be reasonable to attribute the rise in these kinds of training programs, often referred to as “racial equity training,” to the recent rise of racism’s prominence among the general public. 

While this is a good first step and necessary in some cases, “the absence of resources in poor, majority Black communities, especially the lack of prevention services often leaves social workers with very little choice. When there is a substantiated claim of maltreatment within these underserved communities, foster care agents are forced to either essentially ignore the situation or make use of foster care, something that should be a last resort,” said Wulczyn. This would suggest a fundamental error in the way that the welfare system is organized and not the posited claim of individual instances of racism. 

One possible solution that is hopefully on the horizon would be to use the concept of human capital as the primary measure of child welfare. Essentially, human capital is broadly defined as the collection of skills, experiences, and dispositions that one must acquire, in order to become a functional adult within the context of their community. “What I find appealing about human capital as a means to define child welfare is that it is not inherently preferential with regard to racial dynamics,” said Wulczyn. 

“Now one could argue that there are issues with using human capital in pluralist social contexts because of the potentially divergent views of what it takes to be an adult. In these cases, one view could become too dominant and infringe upon others, which is where problems with preferential treatment arise,” Wulczyn pointed out. This is indeed a problem, and it is something that those wishing to maintain the status quo would be quick to point out. However, “this is not an issue with the concept but rather with enduring power dynamics in diverse communities,” Wulczyn added.

The application of human capital as a measurement of child welfare has the potential to allow for more targeted and effective investments into prevention services, making it one of the most advantageous propositions that is currently circulating. The ultimate goal of this recent shift in the world of child welfare is to give more opportunities to families outside of foster care, and through the use of new insightful methods; it just might succeed.  

Throughout the child welfare system’s long, important, and yet seldom understood history, the fates of children have been decided, leaving profound impacts upon society. What is surprising (depending on who you ask)  is how nuanced and convoluted the system is. In spite of this, the child welfare system in tandem with a plethora of other facets of the government works to promote one common goal; safety, security, and opportunity for children, regardless of race, gender, or economic background. 

While the story of the American child welfare system includes various ups and downs, its evolution has remained constant.  

In 1991, the number of children placed in foster in New York City reached a record height of 49,100. Last year, in 2022, only three decades later, that number plummeted to just under 7,000, a decrease of over 700%. While this change can be ascribed to a multitude of societal factors, namely, the end of the crack epidemic, it is also a reflection of how the system has adapted to changing times, with effective policies such as the Adoption and Safe Families Act that aims to keep children with their parents, whenever possible. 

Nevertheless, the child welfare system is still in need of some serious changes. Currently, outcomes for children in foster care look all too bleak, despite having been vastly improved over recent decades. Experience with the child welfare system continues to place children at higher risk for mental illness, homelessness, substance abuse problems, and run-ins with the law. Experience with the system also has severe implications in regards to education. According to a 2019 New York City Administration for Children Services Report (ACS), only 25% of children with foster care experience graduate with a high school diploma, with only 4% obtaining a four-year degree. 

To some extent, these disparities will never cease to exist because of the trauma associated with instability in the home. Even so, the gaps can be mitigated with the continued support of the government, social service agencies, and ultimately, the general public. Perhaps a good place to start would be increasing investment in prevention services. 

“New York City, along with a few other places in the U.S., seems to be positioning itself to reimagine the existing system,” said Fred Wulczyn, Ph.D., the Director of the Center for State Child Welfare Data at Chapin Hall, University of Chicago.