Are Foster Children Made Better Off by Informal Fostering Arrangements?

Abstract

Using data I collected in Africa, this paper examines a household’s decision to adjust its size through child fostering, an institution where biological parents temporarily send children to live with other families. Households experiencing negative idiosyncratic income shocks, child gender imbalances, located further from primary schools, or with more "good" quality network members (fewer subsistence farmers and unmarried individuals and more educated members) are significantly more likely to send a child. Results reject an overall symmetric fostering model across senders and receivers, but evidence of symmetry is found when the test is restricted to exogenous income shocks and gender imbalances.

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Are Foster Children Made Better Off by
Informal Fostering Arrangements?∗
Legrand Yémélé Kana†
Sylvain Dessy‡
Jacques Ewoudou§
May 5, 2010
Abstract
This paper explores the effects of informal child fostering arrangements on the
welfare of the children involved. If Hamilton’s rule applies in all countries reporting
a high incidence of foster children, then tolerance of this phenomenon indeed is
puzzling. To explain this puzzle, we use a model of child fostering in which a child’s
school performance is jointly influenced by his nutrition status and the time he
has available at home to develop his learning skills and prepare for national school
tests. We show that child fostering arrangements embedding this feature of human
capital accumulation make the foster child better off when nutrition is paramount
to a child’s ability to achieve academic excellence.
JEL: D13; J13; O12; O15;
Key words: Child Fostering, Child Nutrition, Foster Child’s Welfare.
∗We would thank Arnaud Dellis, Yann Bramoullé, Sabine Kröger for insightful comments. Sylvain
Dessy acknowledges financial support by SSHRC under Grant No. 410-2007-0413
†Département d’Économique et CIRPÉE, Université Laval,
kana.1@ulaval.ca.
‡Département d’Économique et CIRPÉE, Université Laval, Qc, Canada: sdes@ecn.ulaval.ca.
§Statistics Canada, Ottawa, Canada: jacquesewoudou@hotmail.com.
Qc,Canada:legrand-yemele-
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1. Introduction
Informal child fostering arrangements are voluntary and reversible transfers of children’s
residence from parents to non-parents within extended family networks. These arrange-
ments are prevalent in sub-Saharan Africa, though their occurrence is not restricted to
this region1. If altruistic actions are restricted to beneficiaries that are closely related to
actors, as Hamilton’s rule suggests, then developing countries’ ongoing tolerance of this
informal institution needs to be explained.
Research on the effects of fostering arrangements on the welfare of the children in-
volved was pioneered by Ainsworth (1990 and 1996) who finds evidence in Cote d’Ivoire
that these arrangements adversely affect the welfare of foster children. The validity of
this finding, however, was subsequently rejected by Zimmerman (2003) who finds evidence
that foster children in South Africa are not at a disadvantage compared to biological chil-
dren, in terms of enrolment rates. But school enrolment rates by themselves are not
hard evidence of fostered children’s success at accumulating human capital. How these
children perform in national tests at the end of primary and secondary education, for
example, may actually matter more than school attendance.
The ensuing debate on the welfare effects of child fostering unfortunately highlights
a lack of consensus among scholars seeking to improve our understanding of this infor-
mal institution: whereas Fafchamps and Wahba (2006) corroborate Ainsworth’s findings
in a case study of Nepal, Akresh (2009), by contrast, corroborates Zimmerman’s find-
ings based upon an empirical analysis of child fostering arrangements in Burkina Faso.
Arguably, these mixed results suggest the existence of cross-country differences in the
effects child fostering arrangements have on the welfare of the children involved. Why
may there be differences across countries with regard to the effects of informal child fos-
tering arrangements? If in all countries reporting a high incidence of foster children such
arrangements are restricted to a temporary migration of children within extended fam-
ily networks, and Hamilton’s rule equally applies to all these environments, then these
cross-country differences are puzzling. This paper is primarily concerned with explaining
this puzzle.
We propose a theoretical analysis of adults’ decisions to participate in child foster-
ing arrangements in the context where parental altruistic actions are restricted to own-
children. Several factors can be linked to the decision to foster a child. First, in the
absence of a well-functioning market for domestic labor services such as cooking, clean-
ing, water-fetching, etc., participating in a fostering arrangement may allow a family to
improve the welfare of its members by fostering in-child domestic labor. On the one
1See Zimmerman 2003 for a review of evidence on the prevalence of this institution in Africa.
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hand, domestic labor by the foster child (hereafter referred to as in-foster) may partially
substitute for the foster parents’ labor input in household chores, thus allowing them to
achieve a higher degree of specialization in market activities that increase family income.
On the other hand, the in-foster’s labor may also alleviate the biological child’s domestic
workload, thus allowing the latter to allocate more time to after-school learning activi-
ties such as reviewing daily school lessons, studying for national school tests and reading
magazines and books to improve vocabulary.
Observe that since household chores (e.g., water-fetching, cleaning, or running er-
rands) can be undertaken before or after school, they need not preclude school attendance
by the in-foster. Therefore, for parents too poor to educate their own children, fostering
some of them out to extended family members can become an attractive strategy for
enhancing their human capital accumulation. An important contribution of this paper is
to highlight the interplay in a child human capital formation between his or her nutrition
status and the time he or she has available for engaging in after-school learning activities.
There is ample evidence that proper nutrition is key to a child’s ability to function
and learn, as shown within the economics literature by Pitt and Rosenzweig (1990) and
Alderman, Behrman, Lavy, and Rekha (1997). In the public health literature, Brown,
Beardslee, and Prothrow-Stith (2008) also corroborate these findings based on a review
of a large number of research contributions focusing on the effects of child nutrition on
academic excellence in school. Likewise, there is also evidence that academic excellence
in school begins at home, where parents provide a good learning environment for their
children, giving them adequate time to organize for national tests, review daily lessons,
or put in sustained effort to improve their writing and math skills (Pohlsen 1984). In a
case study of school performance in the Thiruvananthapuram District of the Indian State
of Kerala, for example, Nair, Mini, and Padmamohan (2003) found that not allocating
enough studying time to reviewing daily lessons was an important factor of poor school
performance among adolescents. In our model, household chores and after-school learning
activities have a competing claim on a child’s non-schooling time.
By emphasizing a child’s nutrition status and a child’s time allocated to after-school
learning activities as joint determinants of a child’s human capital, our theory of child
fostering arrangements opens up the possibility that parental out-fostering strategies are
affected by the intertwined concerns for both adequate child nutrition and studying time
for school. On the one hand, domestic child labor by the in-foster directly or indirectly
enhances the foster family ability to provide its members with proper nutrition. On
the other hand however, if excessive, the foster child’s involvement in household chores
may hamper his or her school performance by reducing the time he or she has available
for after-school learning activities. We argue that this trade-off has implications for the
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effects non-parent residence has on the human capital of in-fosters.
To explore these effects, we model the optimal child fostering arrangement as the out-
come of a cooperative game between a sending household and a receiving household over
how much labor time the in-foster is to allocate to household chores. This modeling strat-
egy seems reasonable for two main reasons. First, asymmetric motives for child fostering
generate a potential conflict between the receiving household and the sending household,
stemming from the trade-off between the immediate benefits of child labor to the former
and the future human capital benefits to the latter. It is therefore reasonable to expect
the optimal child fostering arrangement to be one that resolves this conflict. Second, as
child fostering is restricted to temporary migration of children within extended family
networks (Zimmerman 2003, Akresh 2009), and reputation and trust are the cornerstone
of such networks, bargaining outcomes are virtually self-enforcing, and thus may need no
external provision of enforcement mechanisms. We show that the optimal child fostering
arrangement unambiguously improves the in-foster’s nutrition status. We also show that,
as a reflection of Hamilton’s rule, there are asymmetries in human capital levels between
the in-foster and the biological child, despite equal enrolment in school. Indeed, while
they both enjoy the same nutrition status (Serra 2009), and are both enrolled in school
(Zimmerman 2003), the in-foster, however, has less study time, and always contributes
more time in household chores than the biological child does. Despite this intra-household
inequality due to Hamilton’s rule, our model predicts that to the extent that nutrition is
paramount to a child’s ability to perform in school, non-parent residence brings about a
Pareto-improvement in the in-foster’s human capital relative to own-parent residence.
Numerical simulations of the model indeed highlight necessary and sufficient condi-
tions for the optimal child fostering arrangement to enhance the in-foster’s human capital.
We show that when nutrition is relatively more productive than after-school learning ac-
tivities in a child’s human capital, being fostered out causes a child’s level of human
capital to exceed the level that would have been obtained under own-parent residence-
a situation we refer to as autarky. Only when a child’s time allocated to after-school
learning activities is relatively more important than nutrition in determining a child’s
ability to accumulate human capital can the fostering arrangement become largely an
inter-household transfer of domestic labor (Ainsworth 1996), a situation that leaves the
in-foster worse off. This situation can occur, for example, in environments where the
quality of in-school education is too low. Since in most developing countries school chil-
dren must take national tests at the end of the primary and secondary education, a poor
quality of in-school education (as reflected for example by large pupil-to-teacher ratios,
or high incidences of absenteeism among teachers) can put pressure on parents to pro-
vide more study time for their school-age children, or, better yet, resort to after-school
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tutoring to increase their children’s chances of passing national tests. In such environ-
ments, after-school learning activities can have a much larger contribution to a child’s
human capital than his or her nutrition status. Our analysis therefore suggests that in
countries where informal child fostering arrangements have been found to adversely affect
the in-foster’s human capital, the poor quality of the formal education system may be to
blame.
This paper draws on the theoretical work of several authors who have previously an-
alyzed the effects of informal child fostering arrangements on the welfare of the children
involved. Whereas Zimmerman (2003) studies child fostering arrangements solely from
the viewpoint of the receiving household, we extend this analysis to include the sending
household as well. This modelling strategy enables us to approach child fostering ar-
rangements as outcomes of cooperative games between sending households and receiving
households. In our model, the object of inter-household bargaining is the level of the
in-foster’s input in domestic labor activities.
Our analysis is closest to Serra (2009), but differs from hers in two important ways.
First, Serra’s analysis is not explicitly concerned with cross-country differences, and there-
fore cannot be used to understand such differences. Second, in Serra (2009), foster families
with high socioeconomic status though probably aware of the positive externality they
generate in their in-fosters’ human capital, make no attempt to extract rents from it.
This view, however, is impervious to her maintained assumption that parental altruistic
actions are restricted to own-children. Indeed, if Hamilton’s rule applies, inter-household
differences in socioeconomic status can translate into large asymmetries in bargaining
power between the sending and the receiving household. These asymmetries, in turn, can
affect the foster child’s ability to take advantage of the positive externality generated by
non-parent residence in a household with high socioeconomic status. In our model, given
that Hamilton’s rule applies, the optimal fostering arrangement becomes the outcome
of a cooperative game, in which participating households use the level of welfare they
derive from enforcing own-parent residence for their respective children as a threat-point.
Households with a higher threat-point are more impatient in the negotiation, while those
with a low threat-point are more patient. Our numerical simulations show that in-fosters’
domestic workload is lower when their biological parents have a sufficiently high bargain-
ing power. The reverse is true when biological parents have a sufficiently low bargaining
power. Contrary to Serra (2009) our results are intended (as opposed to unintended)
consequences of the actions of all parties involved.
The remainder of this paper is structured as follows. Section 2 presents a descrip-
tion of the environment. Section 3 characterizes household welfare and child welfare in
autarky corresponding to the enforcement of own-parent residence for all children. This
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