The social economic impact of AIDS: Accounting for intergenerational transmission, productivity and fertility
AbstractIn this paper we develop a model that aims to investigate the economic and demographic impacts of three effects of the HIV-AIDS epidemic in developing countries. The direct effect of the HIV epidemic is that it increases mortality and morbidity. The two indirect effects, resulting from the first, are the reduction in productivity of adults and the transmission of the disease to their offsprings. We allow these different effects to act either separately or together, and we investigate the marginal efficiency of health expenditures on the survival probability of individuals and demographics. The direct effect of the HIV virus is that it leads adults to increase their own health expenditure and to decrease that of their children. On the contrary, the transmission effect of the HIV virus leads parents to spend more on their children than on their own. We show that the reduction in productivity of young adults decreases health expenditures for themselves and their children. Furthermore, we find that the productivity effect dominates by large the two others. Moreover, when adults decide to have fewer children because of HIV, we show that the ratio of low to high skilled workers increases. This demographic impact impoverishes the economy in the short and medium run.
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Bibliographic InfoArticle provided by Elsevier in its journal Economic Modelling.
Volume (Year): 29 (2012)
Issue (Month): 2 ()
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/30411
Orphans; Epidemic; Transmission; Productivity shock; Survival rate;
Other versions of this item:
- Chrysovalantis VASILAKIS, 2010. "The social economic impact of AIDS: Accounting for intergenerational transmission, productivity and fertility," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2010046, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
- D9 - Microeconomics - - Intertemporal Choice
- I1 - Health, Education, and Welfare - - Health
- I2 - Health, Education, and Welfare - - Education
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