Costs and Consequences: Understanding the Impact of Fostering on Carers by Marilyn McHugh BSW Thesis submitted to the University of New South Wales in fulfilment of the requirements for the degree of Doctor of Philosophy in Social Science and Policy Sydney 2007 Originality Statement ‘I hereby declare that this submission is my own work and to the best of my knowledge it contains no materials previously published or written by another person, or substantial proportions of material which have been accepted for the award of any other degree or diploma at UNSW or any other educational institution, except where due acknowledgement is made in the thesis. Any contribution made to the research by others, with whom I have worked at UNSW or elsewhere, is explicitly acknowledged in the thesis. I also declare that the intellectual content of this thesis is the product of my own work, except to the extent that assistance from others in the project's design and conception or in style, presentation and linguistic expression is acknowledged.’ Signed …………………………………………….............. Date …………………………………………….............. i Not everything that can be counted counts and not everything that counts can be counted Albert Einstein (attributed) (Physicist) (1879-1955) ii Abstract This thesis reports on a study examining the direct and indirect costs to volunteer carers of providing a fostering service in Australia. The study highlights the current difficulties in carer recruitment and retention, the increases in the challenging and complex needs of the children coming into care, and the growing professionalism of fostering. The study uses a budgetary approach to estimate the direct costs of fostered children. In-depth interviews and focus groups with carers are instrumental in providing a range of perspectives that assist our understanding of how the direct costs of fostered children are different from (higher than) the costs of other children. The study found the costs of fostered children were 40 per cent higher than the costs of children not in care. The thesis indicates that, to maintain and retain a volunteer workforce, an adequate carer remuneration system to meet the direct costs of fostered children is critical. To examine the indirect costs of fostering, the study uses a multi-method approach providing a monetary value of the opportunity costs (foregone earnings model) and time costs (proxy good or market replacement model) for foster carers. The emotional and psychological dimensions of fostering are also examined, though no monetary value is assigned to these costs. Carers’ vivid and contrasting stories from the interviews explain how ‘money’ fits with carer motivation and fostering’s more professional role, how carers perceive the nature of fostering (job or parenting), and whether carers should be paid to foster. Revelations of fostering’s emotional and time dimensions and restricted employment opportunities (indirect costs) highlight the impact fostering has on carers and their families. The study found that the indirect costs of fostered children were around four times the value of the direct costs. In light of the growing professionalism of contemporary foster care, difficulties in carer recruitment/retention, and the demanding nature of fostering, the thesis examines whether carers should be paid for the service they provide (compensation for indirect costs). Using a number of theoretical concepts developed by feminist economists and social theorists on paying for caring labour, the thesis found support for the contention that altruism (‘love’) and carer pay (‘money’) are not incompatible, and ambiguities and tensions for foster mothers around money and love can be resolved. Studies of countries where carers receive a wage component as part of their iii remuneration package provide insights into wage levels, perceived adequacy of the wage, and the impact of wages on carer recruitment/retention. The study found that, due to the profoundly gendered nature of fostering, the compensatory aspects of remuneration (fee/wage or salary) are generally poor. The implications for government welfare spending of paying Australian carers are discussed, and the savings to governments of using a volunteer workforce are demonstrated. iv Acknowledgements This report is dedicated to all foster carers No researcher could hope to understand the day-to-day life of fostering without first appreciating a carer’s role in it. To the carers go my warmest thanks and appreciation for the time they took out of their busy lives to provide me with a wealth of information of the costs of caring. The extensive material and emotional costs they take on board in their caring role cannot be overstated. The skills, insights and knowledge they bring to the profession of fostering are remarkable. I would like to thank those people from the Aboriginal State-wide Foster Carer Support Services, the New South Wales Foster Care Association, the Foster Parent Support Network and non-government agencies for inviting carers to participate in the study. I would also like to acknowledge the financial and in-kind contribution provided by the industry partner, ACWA and my personal thanks to Nigel and Eric at ACWA for their continuing support and interest. I am indebted to my supervisors, Professor Peter Saunders, Dr Rogelia Pe-Pua and Dr Deb Oxley. Their guidance, support and supervision over the years provided me with the energy and inspiration to complete the project. Peter and Rogee brought complementary skills and expertise in defining the shape and direction of the thesis and for their input and professionalism I am truly grateful. My colleagues and friends at the SPRC have been tremendous in the interest they have shown in the topic and in my ongoing progress. I am indebted to all but especially to Denise Thompson at the Centre who assisted with tape transcriptions, editing and feedback on the thesis content; her contribution has been substantial. Solutions to my word processing problems and other IT support were provided by Duncan – many thanks. Thanks to my family (especially Tony) and friends who also travelled this long and winding road from beginning to end – without their support and encouragement I would not have made it to the finish. v Table of Contents Originality Statement ................................................................................................................ i Abstract… iii Acknowledgements ....................................................................................................................v Table of Contents ..................................................................................................................... vi List of Tables ..............................................................................................................................x List of Figures .......................................................................................................................... xi Glossary.… .............................................................................................................................. xii Chapter 1 Introduction .............................................................................................................1 1.1 Research aims and questions .................................................................................. 2 1.2 Key concepts ........................................................................................................... 4 1.3 Research rationale ................................................................................................... 8 1.4 Structure of the thesis .............................................................................................. 9 Chapter 2 The Evolving Nature of Australian Foster Care ...............................................13 2.1 The importance of foster care ............................................................................... 13 2.2 Key components in the rationale for studying carer costs .................................... 15 2.3 Historical perspective ............................................................................................ 21 2.3.1 Indigenous historical perspective .............................................................. 31 2.4 Contemporary foster care ...................................................................................... 33 2.5 Changing nature of foster care .............................................................................. 37 Chapter 3 Theoretical Framework: Estimating Fostering’s Direct and Indirect Costs and Determining a Carer Wage ............................................................... 42 3.1 Direct Costs ........................................................................................................... 42 3.1.1 Household Expenditure Survey approach ................................................. 47 3.1.2 Budgetary approach ................................................................................... 51 3.1.3 Developing Indicative Budget Standards for Australian households ........ 56 3.1.4 Using the budgetary approach to develop estimates of children’s costs ... 65 3.2 Indirect Costs ........................................................................................................71 3.2.1 Estimating the indirect costs of children ................................................... 71 3.2.2 Opportunity costs or earnings foregone ...................................................