Association for Public Policy Analysis & Management

Children’s post-divorce placement arrangements have changed dramatically in recent decades, with growth in shared placement and decline in sole mother placement. In Wisconsin, where this trend is particularly well documented, shared placement increased from 14% of divorces in the early 1990s to over half of divorces in 2013. While considerable research has focused on the impact of placement arrangements on children’s behavioral and developmental outcomes, there has been much less empirical attention to shared placement’s economic impacts. Yet the potential economic implications of placement arrangements are considerable: placement arrangements impact how much of the direct costs of children are borne by each household; how much child support is transferred between households; and, potentially, parents’ opportunities and choices regarding employment and earnings. To the extent that shared placement leads to a greater duplication of expenses, it also increases the total costs of children. In short, a shift from sole to shared placement changes the economic calculus of divorce in ways that are not well understood.

This paper examines the economic implications of shared placement for divorced mothers. We use harmonized longitudinal administrative data from multiple agencies in Wisconsin to examine how mothers’ economic wellbeing changes from pre-divorce through up to 6 years after divorce – and how these trends differ for mothers with shared placement as compared to sole-mother child placement arrangements. We focus on several economic wellbeing measures, including total income, needs-adjusted income, and poverty status; and we also examine changing income composition. Income data are drawn from wage records, child support payments and receipts, Supplemental Nutrition Assistance Program (SNAP) records, Unemployment Compensation, and other public assistance. The sample includes mothers in 21 Wisconsin counties who divorced over a ten-year period spanning 2003-2013.

We find that shared placement continues to be more common in higher-income households, although the differences across income groups have been declining. Our initial analyses based on a two-year follow-up period show that mothers with shared placement continue to fare better after divorce, in absolute terms, than their sole-placement counterparts. However, mothers with shared placement also experience substantially larger declines in economic wellbeing as compared to sole placement mothers. Our paper extends these analyses to a larger and more economically diverse sample; follows mothers for a longer time period following divorce; and pays particular attention to the role of different income sources (earnings, child support, public assistance) across placement groups and over time. Results will provide substantial new information about the post-divorce economic trajectories of mothers with different placement arrangements, and will provide critical insight into a rapidly growing family structure.