Shocks, Health, and Transfers: Social Exchange as Social Insurance in Rural Malawi

Joshua Stroud, Tulane University
Philip A. Anglewicz, Tulane University

In resource-deprived settings, individuals often rely on informal transfers to mediate the effect of shocks. We examine the effect of economic shocks on physical and mental health in rural Malawi and the potentially mediating role of transfers on this relationship. We use data from the Malawi Longitudinal Study of Family and Health, a longitudinal panel study set in three areas of rural Malawi. Our results show that women experience decreasing mental health as shocks aggregate while men do to a lesser degree; neither men nor women appear to experience decreased physical health in the presence of shocks, a finding consistent with research reporting that transfers insure against health shocks. We test three hypotheses to explore the relationship between health, shocks, and transfers. We find that shocks, number of transfer partners, and physical distance to transfer partners are non-linearly associated with mental health status for men and women.