This report addresses the widespread belief that youth who fail to reach a permanent status with parents or other relatives and who thus remain in foster care until reaching the age of 18 are likely to face poor economic and social circumstances as they enter adulthood. Concerns about the prospects of such youth prompted the creation of the 1999 Foster Care Independence Act, which provides fiscal incentives to states to encourage them to enhance their services for this population of young people. Concentrating on the economic outlook for children exiting foster care near their eighteenth birthday, the study examines the employment outcomes of such youth in California, Illinois, and South Carolina during the mid-1990s. Researchers study the likelihood of youth having earnings both prior to and after their eighteenth birthday, the amount of earnings during this period, and the change in earnings from the first to the second year after their eighteenth birthday; these employment outcomes are then compared to outcomes of youth reunited with their parents prior to their eighteenth birthday and to those for low income youth. Key findings include the discovery that youth aging out of foster care are underemployed, and that even those who do work have a mean level of income below the federal poverty line. Youth aging out of foster care who do work begin early, researchers note, although these youth tend to progress rather slowly in the labor market in comparison with other youth. In sum, this analysis clearly demonstrates that youth aging out of foster care have very low levels of employment and earnings. Researchers expect the results of the study to serve as a baseline against which to measure changes in employment outcomes for children aging out of foster care as a result of new efforts on the part of states to improve the conditions of these youth.