A large body of medical knowledge exists that can inform the public po
licy debate as to whether the current needs and future life prospects
of poor children could better be served in orphanages than by continui
ng safety net programs, such as Aid to Families with Dependent Childre
n, Medicaid, and Supplemental Social Security Income, which maintain c
hildren in families. This special article explores a century of pediat
ric and child psychiatry research covering five areas of potential bio
logic and social risk to infants and young children in orphanage care:
(1) infectious morbidity, (2) nutrition and growth, (3) cognitive dev
elopment, (4) socioaffective development, and (5) physical and sexual
abuse. These data demonstrate that infants and young children are uniq
uely vulnerable to the medical and psychosocial hazards of institution
al care, negative effects that cannot be reduced to a tolerable level
even with massive expenditure. Scientific experience consistently show
s that, in the short term, orphanage placement puts young children at
increased risk of serious infectious illness and delayed language deve
lopment. In the long term, institutionalization in early childhood inc
reases the likelihood that impoverished children will grow into psychi
atrically impaired and economically unproductive adults.