SOFI Working Papers in Labour Economics,
Stockholm University, Swedish Institute for Social Research

Abstract: Divorce reshapes family life, yet little is known about one of its most consequential features: the allocation of child custody. We study the impact of joint versus sole custody on both parents and children using rich administrative data from Sweden linked to over 25 years of newly-collected court custody rulings. To address selection concerns, we exploit random assignment of custody disputes to judges who differ sharply in their propensity to grant joint custody. For fathers, joint custody substantially raises earnings and improves mental health, consistent with sustained paternal involvement enhancing labor market attachment and psychological well-being. In contrast, there are no measurable labor market or mental health effects for mothers. Turning to children, joint custody increases standardized test scores and school quality without affecting mental health outcomes. Joint custody increases fathers’ chances of remarriage, keeps separated parents in closer geographic proximity, and has no effect on intimate partner violence allegations against either partner. These findings inform longstanding debates over the role of child custody in shaping post-divorce family life.

Keywords: Child custody; divorce

JEL-codes: J12; J13

Language: English

76 pages, July 27, 2026

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