Infants under two who spend one night a week or more away from their primary carer show significantly more signs of irritability and separation anxiety, are more fretful, tearful and difficult to soothe than other babies, it also shows.
And young children aged two to three are even more profoundly affected if they spend five nights or more a fortnight away from the primary carer - the legal definition of shared care. They have higher anxiety levels than other children, more eating disturbances and aggressive behaviour.
They show less persistence in tasks, and more problematic behaviour such as crying or hanging on to the main carer.
The research, commissioned by the federal Attorney-General, Robert McClelland, is part of a series that has cast doubt on aspects of the 2006 family law changes that put greater emphasis on shared parenting.
The lead author, Jennifer McIntosh, an associate professor in psychology at La Trobe University, has called for shared care to no longer be the starting point for discussions about post-separation parenting arrangements for very young children.
''The negative impact on the emotional and behavioural functioning of this age group is significant,'' she said.
The study is drawn from the Longitudinal Study of Australian Children sample with more than 10,000 children aged under four, but the numbers of pre-school children who spend some nights a fortnight away from the main carer numbered in the hundreds.
It showed that regular overnight stays were associated with developmental risks.
However, children aged four to five showed no ill effects.
Dr McIntosh said: ''We don't want to give the impression that overnight care is an absolute no-no for children under four. If an occasional overnight stay makes the primary carer a better parent it's probably a good thing.''
But regular overnight care could interfere with infants' attachment to the primary carer which was needed for development.