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The Effectiveness of Social Policy through the Tax System: Do State Adoption Tax Credits Increase Adoptions from Foster Care?

Erin Henry & D. Walker

Journal of the American Taxation Association2025https://doi.org/10.2308/jata-2023-052article
AJG 3ABDC A
Weight
0.37

Abstract

Federal and state governments forgo significant revenue by using tax expenditures to achieve social policy goals. To facilitate recent initiatives toward evidence-based policymaking, we examine the determinants and consequences of state adoption tax credits. We find no evidence that implementation is associated with incremental foster care adoption outcomes on average. We then utilize our state setting to examine the incremental effect of adoption credits on specific segments of the foster care population and of specific credit characteristics. We find that adoption tax credit implementation is associated with increased adoptions of children without medical needs and infants, and faster adoptions for nonwhite foster children. Further, we find more and faster adoptions in low-income states and faster adoptions when the credit is targeted to benefit in-state adoptions. Finally, our results suggest that a recurring adoption tax credit is a more effective policy choice than the size of the credit or refundability. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: H20; H24; H31; H71.

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https://doi.org/https://doi.org/10.2308/jata-2023-052

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@article{erin2025,
  title        = {{The Effectiveness of Social Policy through the Tax System: Do State Adoption Tax Credits Increase Adoptions from Foster Care?}},
  author       = {Erin Henry & D. Walker},
  journal      = {Journal of the American Taxation Association},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.2308/jata-2023-052},
}

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Evidence weight

0.37

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.16 × 0.4 = 0.06
M · momentum0.53 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.