Measuring the cost of leaving care in Victoria

On any given night in Victoria, around 4,000 children and young people live under the care and protection of the State. For many young people, this care extends over a long period of time, sometimes until their 18th birthday. It is well documented that young people leaving State care often lack the social and economic resources to assist them in making the transition into independent living. As a consequence, the long-term life outcomes from this group are frequently very poor. A recent report from The Centre for Excellence in Child and Family Welfare in partnership with Monash University estimated that, for a typical cohort of 450 young people who leave care in Victoria each year, the direct cost to the State resulting from these poor outcomes is $332.5 million. The estimated average outcomes of the leaving care population are based on a recent survey involving sixty young people who had spent at least two years in care as teenagers. This paper provides an overview of the economic methodology used to estimate this cost, and provides discussion of the motivation for measuring outcomes in terms of costs to the State.