Adoptable Baby Needs Loving Home – No Reserve Auction

“Given the pervasiveness of auctions and the flexibility of auction design, it is perhaps time to use auctions to assign the right to adopt a child,” write Erwin A. Blackstone, Andrew J. Buck, and Simon Hakim of Temple University in the industry journal Children and Youth Services Review.

Their affiliations are not in the field of child welfare. Rather they are based in the University’s Center For Competitive Government and Department of Economics, making them experts at finance.

And, without question, high finance has everything to do with foster care.

For decades, advocates have decried the perverse financial incentives “favoring placement over prevention.” The Pew Commission on Foster Care is among the latest group to have brought the issue into the spotlight.

A 1990 report by a the Select Committee on Children, Youth and Families found that: “Funding mechanisms create disincentives to keeping families together and maintaining children in the community.” As one witness who’d testified before the before the Committee explained: “Federal children’s programs are structured and funded in such a way that states face perverse incentives to place children into substitute care rather than to support families; funding for placement prevention and family preservation services is minimal, while funding for placement services is an open-ended entitlement.”

As experts in finance, Blackstone, Buck and Hakim need not enshroud their financial proposals in the finery of words. As they are not masquerading as child savers, they don’t have to call removing children from their homes to promote bureaucratic expansion “rescuing children from abuse and neglect.” Nor do they have to call the federal adoption bounty a means of “rewarding states for providing permanency.”

Advocates have recently identified a new category of “legal orphans” who by virtue of having had their rights to their parents terminated by default under the Adoption and Safe Families Act, continue to languish in state care for years – the essential difference between the modern era and the yesteryear of foster care being that the possibility of being returned to their own homes has been irrevocably foreclosed. Indeed, some advocates have gone so far as to suggest that states consider “unterminating” parental rights in order to secure true permanency for at least some of these new legal orphans.

If that sounds like a far-fetched idea, consider the alternative proposed by the three experts in finance from Temple University, who note that auctions are something that the general public is familiar with, as eBay has become something of a household word. Surely there must be something that we can do with all of these children that we have now freed up for adoption. But what in the world can it possibly be?

The solution they propose is simple and elegant. Just auction them off to the highest bidder. They have even developed a set of rules for the game to keep the playing field level:

At each round of the all-pay simultaneous ascending auction with bid cap, each prospective parent would submit a sealed bid for the child(ren) they wish to adopt. The bidder may bid for the right to adopt just one child or may split their bid among several in order to reflect her preference ordering over the children available for adoption. Bidding a larger amount for just a single child raises the probability of winning the right to adopt that particular child. Splitting the amount bid among several children raises the probability of winning the right to adopt some child.

In order to remain active in the bidding process, the prospective parent must either increase her bid from round to round or switch her bid to a different child. In switching to a different child, the switched bid must exceed any outstanding bid already placed. If a bidder becomes inactive, then she loses an amount equal to her last bid and is not eligible to adopt. Bidding continues until all of the children are adopted. It is well established that when the basic auction assumptions are relaxed, then the greatest amount of revenue is generated by an ascending bid auction. This aspect of our proposal therefore makes as much money as possible available to endow the least desirable children, as in the Greek marriage auction.

There’s the solution, drawn verbatim from a peer-reviewed social work journal.

But while it may work, there’s something rather unsettling about where all of this may lead. I often surf eBay to unwind at the end of the day, and I dread the thought of encountering a listing that reads: “Black 5-year-old special needs child separated from siblings – No reserve!”

Wait – a stroke of brilliance. Forget the auctions! Forget the unterminations!

Let’s just encourage the parents who have had their parental rights terminated by default under ASFA to adopt their own children back out of foster care. That way, they’ll have plenty of money to take care of them with their adoption subsidies, and the condition that truly led to their children’s placement to begin with – namely their poverty – will be gone.

Related reading:

Erwin A. Blackstone, Andrew J. Buck, Simon Hakim, Privatizing Adoption and Foster Care: Applying Auction and Market Solutions, Children and Youth Services Review, 26 (2004) 1033– 1049.

Randi J. O’Donnell, A Second Chance For Children And Families: A Model Statute To Reinstate Parental Rights After Termination, Family Court Review, Vol. 48 No. 2, April 362–379.

Cameryn Schmidt and Brenda Dabney, Restoring Parental Rights: Giving Legal Orphans a Chance at a Family, Child Law Practice, Vol. 25 No. 11.

Olivia Golden, et al., Intentions and Results: A Look Back at the Adoption and Safe Families Act, Urban Institute, Dec. 2009.

Sheri L. Hazeltine, Speedy Termination of Alaska Native Parental Rights: The 1998 Changes to Alaska’s Child in Need of Aid Statutes and Their Inherent Conflict With the Mandates of the Federal Indian Child Welfare Act, 19 Alaska L. Rev. 57.