The Cost of Lost Potential: An Economic Analysis of the Foster Care System

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14 Apr 2026

Labour, Migration and Social Policies

Aleksandra Kolasa

Jan Hagemejer

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Aleksandra Kolasa

Senior Economist
Dr Aleksandra Kolasa is a Senior Economist at the CASE - Center for Social and Economic Research, where she is responsible for econometric analysis and economic research, primarily in the area of taxation. Her academic interests revolve around monetary poverty, inequality, and household welfare. She has extensive experience working with micro-level data and life-cycle models with heterogeneous agents. Before joining CASE, Aleksandra led an NCN research grant at the University of Warsaw on the impact of non-income related benefits. From 2010 to 2017, she served as a Senior Economist at the National Bank of Poland, specializing in household sector topics. Her professional experience also includes consulting for the World Bank and working as a data scientist in tech companies. Aleksandra holds a PhD in Economics (with distinction) from the University of Warsaw and an MA in Mathematics from the same institution.

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Jan Hagemejer

President of CASE Management Board, Macroeconomics & Trade Director
Jan Hagemejer’s areas of expertise are international trade as well as macroeconomic and structural issues. He graduated from University of Warsaw where he also obtained his PhD and habilitation, as well as from Purdue University (MA in Economics). He works as an associate professor at the Faculty of Economic Sciences, University of Warsaw. Prior to … <a href="https://case-research.eu/publications/the-cost-of-lost-potential-an-economic-analysis-of-the-foster-care-system/">Continued</a>

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The report focuses on the economic aspects of support within the foster care system in Poland, with particular attention to the level of financial benefits and the situation of young people leaving care. It analyses the scale of public expenditure, the costs of potential reforms, and the long-term consequences of insufficient support, including lost economic value resulting from the underutilisation of young adults’ potential.

The analysis shows that leaving care is associated with a significant drop in public support. Benefits available to care leavers are relatively low and only to a limited extent enable independent living. At the same time, these individuals enter adulthood earlier than their peers raised in biological families, which increases the risk of social and economic difficulties.

Insufficient support at the transition stage may lead to higher public spending in other areas, such as social assistance, healthcare, and the penitentiary system. The report provides estimates of these costs and identifies the level of improvement in support effectiveness at which potential reforms could become cost-effective.

The study also presents estimates of the costs of proposed reforms and measures supporting the transition to independence. The analysis suggests that even moderate improvements in the effectiveness of support could generate long-term economic benefits by reducing the scale of underutilised labour market potential.

Key findings:

The current level of financial support for care leavers is insufficient to cover the costs of independent living.
Even a moderate improvement in the effectiveness of support may generate long-term economic benefits if it reduces the scale of underutilised labour market potential.
The total scale of lost economic benefits resulting from the underutilisation of care leavers’ labour market potential—linked to decisions made at the beginning of independent life—can be substantial, reaching from hundreds of thousands to even millions of PLN per person.

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The Cost of Lost Potential: An Economic Analysis of the Foster Care System

Aleksandra Kolasa

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Jan Hagemejer

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The Cost of Lost Potential: An Economic Analysis of the Foster Care System

Aleksandra Kolasa

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Jan Hagemejer

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