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Federal Cannabis Legalization Could Reduce Foster Care Admissions and Save Taxpayers Significantly

June 27, 2022

A research article published in the journal Economic Inquiry revealed the significant impact that cannabis legalization has had on the foster-care system in the United States. The authors estimate that, “legalization decreases foster-care placements by at least 10%, with larger effects in years after legalization, and for admissions for reasons of parental drug and alcohol abuse, physical abuse, neglect, and parental incarceration.”

The key findings include:

  • Foster care entry due to "parental drug abuse" decreased by 20-30%;
  • Foster care entry due to "physical abuse" decreased by 16-33%;
  • Foster care entry due to "neglect" decreased by 16-31%;
  • Foster care entry due to "parental incarceration" also declined.

The authors hypothesize the decreases are for several reasons including that foster-care policies were updated to be more consistent with cannabis legalization ultimately reducing incarceration and probation violations that cannabis prohibition would dictate families being torn apart and children entering the foster-care system. The other main, hypothesized reason was the substitution effect where parents go from high-risk drugs associated with violence, like alcohol, and switching to marijuana.

The authors found that the national average of administrative and maintenance costs for a single placement are about $25,000. They calculated that the minimum estimate of a 10% reduction in placements, which would be roughly 27,000 fewer new children in the foster-care system, implies that nationwide legalization would reduce the financial burden of the foster-care system by about $675 million, annually.