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Essays on Child Custody Laws, Divorce, and Child Outcomes

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Essays on Child Custody Laws, Divorce, and Child Outcomes Essays on Child Custody Laws, Divorce, and Child Outcomes DISSERTATION Presented in Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy in the Graduate School of The Ohio State University By Yang Chen, B.A., B.S., M.A. Graduate Program in Economics The Ohio State University 2014 Dissertation Committee: Trevon D. Logan, Advisor Lucia Dunn Bruce A. Weinberg Copyrighted by Yang Chen 2014 Abstract Economists have long been interested in the effect of family law on marriage, divorce and child outcomes. The existing literature has focused on the adoption of unilateral divorce laws. However, researchers have overlooked another important legal reform related to divorce: changes in child custody laws. Between the 1970s and 1990s, state custody laws moved from maternal preference, also known as the tender years doctrine, to the best interests of the child doctrine, giving fathers and mothers equal treatment in child custody cases. This dissertation studies the effect of changes in child custody laws on divorce and child outcomes. In the first chapter, I create the first comprehensive coding of child custody law changes in the United States. My legal coding systematically records each individual state's year of transition to gender-neutral custody laws. I use an innovative methodology that takes into account both custody statutes and case law. This coding makes the empirical analysis of the custody law reform possible. Furthermore, the legal coding establishes that states' movement to gender-neutral custody laws is independent of the adoption of unilateral divorce laws in time. I can therefore disentangle the effects of both legal reforms in my empirical analysis. The second chapter examines the impact of the transition in custody laws on divorce. I exploit variation across states in the timing of the legal changes to identify the effect of ii custody law changes on divorce. I find that changes in custody laws have a dynamic effect on divorce rates. The divorce rate increases seven years after a state's adoption of the new custody law and remains elevated thereafter. Also, changes in custody laws increase individuals' likelihood of being separated. The effects I find for custody law changes are independent of the effects of unilateral divorce laws. The lack of an immediate rise in divorce rates and the increased likelihood of separation suggest that custody law changes may alter bargaining within marriage and affect marriage markets, both of which could have implications for child outcomes. The third chapter analyzes the long-term effects of custody law changes on children's educational outcomes. First, I develop an intra-household Nash bargaining model which predicts that the new, gender-neutral custody regulations give fathers greater bargaining power. Importantly, the reform of custody laws alters the bargaining power for all married couples with children, whether they divorce or not. The aggregate effect on child outcomes, however, is theoretically ambiguous, as it depends on the degree of bargaining power changes within marriage and the effect of marital dissolution on children whose parents divorce. Using data from the U.S. Census and the American Community Survey, I examine the long-term implications of growing up in a gender-neutral custody law regime for children, by utilizing variation across states in the timing of custody law changes. My empirical results show that childhood exposure to gender-neutral custody laws has a negative and significant effect on educational outcomes. For example, a man exposed to the new custody law as a child is less likely to graduate from high school by, on average, 2.04 percentage points. Each additional year of exposure to the new custody iii law reduces his probability of high school graduation by 0.24 percentage points. Results are similar for women. Moreover, the results are robust to various specification checks, such as the inclusion of state-specific time trends, and controlling for childhood exposure to unilateral divorce laws. iv To my parents, Aiqing Chen and Xueyi Miao, and to my husband, Jian Shen. v Acknowledgments My deepest gratitude goes to my advisor, Professor Trevon Logan, for his constant guidance and support over the past three years. I have learned so much from Trevon. My discussions with him helped to shape the framework and direction of my work. He came up with numerous ideas and insights that inspired me to make exciting progress in my research. Trevon's encouragement and optimism pushed me through difficult stages, and gave me faith in myself and my research. Trevon always made time for me no matter how busy his schedule was. I am extremely grateful for him for the countless hours he spent reading my papers and presentation slides, giving me comments, taking notes during my seminar and conference presentations, and preparing me for the job market. I am so fortunate to have Trevon as my advisor. I would like to thank Professor Lucia Dunn for her generous guidance throughout my graduate studies. Her advice and encouragement helped me prepare for my job search and future career. I thank Professor Bruce Weinberg for always providing useful feedback to my presentations and offering suggestions on improving my research. I am grateful to Professor David Blau, whose advice and guidance laid foundation for this dissertation. With David's inspiration, I found my way to the topic of child custody laws. Thank you to Professor Daeho Kim who spent many afternoons providing feedback to vi my research and presentations, and preparing me for the job market. I thank Professor Audrey Light whose labor economics course stimulated my initial interest in this field, and who provided feedback to my presentations. I thank Professor Stephen Cosslett for serving on my candidacy committee and taught me econometrics in the first two years of my graduate studies. Thank you to the entire faculty and staff of the Economics Department for help and assistance. My thanks also go to my colleagues and friends at Ohio State. Discussions with my classmates helped me get through the first two years of the program. I learned a lot from the informal workshops that were organized and attended by fellow graduate students in labor economics. Finally, and the most importantly, I want to thank my family. My parents, Aiqing Chen and Xueyi Miao, have always been the greatest source of love and strength. They are my role models who taught me the importance of hard work and perseverance, without which I would not have been able to complete my Ph.D. studies. Thousands of miles away, they are still able to give me power and keep me going, even in my difficult times. My husband, Jian Shen, who I have been lucky enough to know, love and marry during my graduate studies, is a tireless source of love and support. Thank you, Jian, for your constant love, care, support, and encouragement. I am so grateful for having you in my life. My work has also benefited greatly from feedback of participants at various conferences and seminars. All remaining errors are my own. vii Vita March 26, 1988 ..............................................Born – Shanghai, China 2008................................................................B.A. Economics, Fudan University, China 2008................................................................B.S. International Economics and Business, University of Groningen, The Netherlands 2009................................................................M.A. Economics, The Ohio State University 2009 to present ..............................................Graduate Teaching Associate, Department of Economics, The Ohio State University Fields of Study Major Field: Economics viii Table of Contents Abstract ............................................................................................................................... ii Dedication ........................................................................................................................... v Acknowledgments.............................................................................................................. vi Vita ................................................................................................................................... viii List of Tables .................................................................................................................... xii List of Figures .................................................................................................................. xiv Chapter 1: Legal Coding of Child Custody Law Changes ................................................ 1 1.1 Introduction ...................................................................................................... 1 1.2 Coding of Custody Law Changes in Each State .............................................. 5 Chapter 2: Do Gender-Neutral Custody Laws Increase Divorce Rates? ........................ 192 2.1 Introduction .................................................................................................. 192 2.2 Overview of Custody Law Changes ............................................................ 198 2.2.1 Brief History of Child Custody Laws ........................................... 198 2.2.2 Defining Custody Law Transitions ............................................... 199 2.2.3 Joint Custody ................................................................................ 202 ix 2.2.4 Marital-Property Laws .................................................................
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