Can economic incentives for joint custody harm children of divorced parents? Evidence from state variation in child support laws

US state laws vary widely in the treatment of child support under joint custody. While some states require no child support in joint custody cases, other states require fathers with joint custody to pay the same amount as if they had no custody. The economic incentives generated by those custody laws can affect family decisions and the wellbeing of children of divorced parents, both under joint and sole custody. Merging child data from the SIPP with state child support guidelines, we find that economic incentives for joint custody have negative effects on the human capital development and health of children of divorced parents. Custody data together with parental characteristics and time use data suggest that economic incentives for joint custody may limit children's time spent with relatively high-quality mothers, as fathers pursue joint custody in response to the policy. We do not find an effect of economic incentives for joint custody on the probability of divorce and on the wellbeing of children in intact families. Our results are robust to specification changes, and the negative effects of economic incentives for joint custody on the wellbeing of children tend to be larger for girls and for children aged 12 and under.