Sharing The Burden of Death: Implicit Family Insurance, Mortality Shocks and Fertility and Child Health∗

This paper studies the network effects of kinship-based informal insurance on fertility and child health. Using demographic data from Malawi and exploiting differences between the patrilineal and matrilineal kinship in the composition of family network groups, this paper finds that the death of an adult in an insurance network significantly reduces fertility. While we find no evidence of intrahousehold discrimination against fostered kin orphans in terms of human capital investments, our results show that they provide more on-farm labor than biological children of the insuring parents. OLS regressions suggest positive effects of orphans on child health, but we do not find such effects after doing instrumental variables regressions. Results suggest that the positive orphan effects on household income may offset the pressure on household resources that orphan parenting exerts. However, the fertility effects found in this paper imply that household demand decisions are not independent of insuring network effects when formal insurance markets are missing.