This policy research brief summarizes changes in out-of-home placements of children and youth with mental retardation since the implementation of the Supplemental Security Income (SSI) and Individuals with Disabilities Education Act (IDEA) entitlements. Statistics are reported for 1977, 1987, and 1997 to show trends. Statistics were obtained from three surveys, a 1977 survey of state-financed settings for persons with mental retardation; estimates from the 1987 National Medical Expenditure survey, Institutional Populations Component; and a direct survey in 1997 of all 50 states and the District of Columbia (DC) regarding the number of children and youth with mental retardation/developmental disabilities receiving out-of-home residential services. Analysis indicates a substantial decrease (70 percent) in the number (now 25,842) of children and youth with mental retardation placed in residential mental retardation/developmental disability settings, possibly due to SSI and IDEA policies to support children and youth in their own homes and communities. Concerns are raised about new legislation which could result in loss of SSI benefits for up to 45,000 children and youth with mental retardation, and possibly increase future out-of-home placements. Other findings indicated a total estimated annual cost of $1.3 billion for out-of-home placements, an estimated $3.5 billion less than estimated expenditures if the placement rate had remained at the 1977 level. (Contains 14 references.) (DB)