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I only have built one single orphanage in the beginning, to see what it looked like. Since then, I never built one again.
You're right, they are a burden on your economy, completely useless. I don't care about orphans, and let them escape/die if they want.
If your orphanages are constantly filling, I would check your stats for death rates and make sure that you dont have a building or two without heat or too far away from a hospital. I have never needed more than a total of 5 and have had populations over 120k.
Orphanages get you basically more workers over the time, as kids are not disappearing when their parents die or leave the republic.
But if everything works fine, then your workers live long enough and have a high productivity, so you don't need an additional boost to your population.
In contrary: if everything is fine plus having orphanages you will have a hard time to constantly expand your cities, building new residential areas and new industries to support them.
Conclusion:
- if you do aim on achieving a stable republic, you should avoid building orphanages
- if you want to achieve a quickly and constantly growing republic, you need to build orphanages
You could also counter the effect of orphanages by reducing or accepting a lower health level, keeping the increasing population in bounds
However, at maxed out difficulty things might look different. My attempts at these settings so far ended in a constant struggle to keep my republic working at all because of constant workforce shortages (because are fleeing, dying due low health or just not getting enough children before naturaldeath), so I think in this scenario any citizen you get is a bonus (because it spares you the need to pay an immigrant). You have the challenge to care for the orphans, so you don't raise illoyal people - but my feeling is that is is worth in this case, as for the immgration fee you save you can easily buy what you need for the orphanage inhabitants and cope with what employing the tutors costs you in terms of lost workforce elsewhere.
Employment 100%
Happiness 98%
Av. Productivity: 109%
Got a big *ss prison (185 inmates out of 375 cells, that's half full)
Got a big *ss court house which is pretty much all the time inactive.
5 ORPHANAGES ARE NOT ENOUGH. GAME KEEP ASKING FOR MORE.
WHYYYYYY?