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The Impact of HIV on Total Factor Productivity

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  • Alemu, Zerihun Gudeta
  • Roe, Terry L.
  • Smith, Rodney B.W.

Abstract

This study investigates whether HIV prevalence rates impact TFP growth. We construct a panel of data on general macroeconomic indicators and HIV prevalence rates for over 100 countries, for the years 1994 through 2002, and estimate the impact of HIV on TFP growth rates for each country. We find that HIV can have a large negative impact on factor productivity growth in Southern African countries. For example, factor productivity growth in Lesotho falls by up to 23%, and for South Africa factor productivity growth falls by up to 15%. We then investigate the potential impact of the disease on the economic growth of Lesotho and South Africa. This is accomplished by calibrating a single sector, neoclassical model of economic growth with endogenous savings to the two countries. The models show that TFP effects can have large, negative impacts on both per capital and aggregate GDP.

Suggested Citation

  • Alemu, Zerihun Gudeta & Roe, Terry L. & Smith, Rodney B.W., 2005. "The Impact of HIV on Total Factor Productivity," Bulletins 12976, University of Minnesota, Economic Development Center.
    • Handle: RePEc:ags:umedbu:12976
    DOI: 10.22004/ag.econ.12976
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    References listed on IDEAS

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    1. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 83-116.
    2. Harrison, Ann, 1996. "Openness and growth: A time-series, cross-country analysis for developing countries," Journal of Development Economics, Elsevier, vol. 48(2), pages 419-447, March.
    3. Channing Arndt & Jeffrey D. Lewis, 2001. "The HIV|AIDS pandemic in South Africa: sectoral impacts and unemployment," Journal of International Development, John Wiley & Sons, Ltd., vol. 13(4), pages 427-449.
    4. Matthew Cole & Eric Neumayer, 2006. "The impact of poor health on total factor productivity," Journal of Development Studies, Taylor & Francis Journals, vol. 42(6), pages 918-938.
    5. C Arndt & J D Lewis, 2000. "The Macro Implications of HIV/AIDS in South Africa: A Preliminary Assessment," South African Journal of Economics, Economic Society of South Africa, vol. 68(5), pages 380-392, December.
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    Cited by:

    1. Jamiu Adetola Odugbesan & Husam Rjoub, 2019. "Relationship among HIV/AIDS Prevalence, Human Capital, Good Governance, and Sustainable Development: Empirical Evidence from Sub-Saharan Africa," Sustainability, MDPI, vol. 11(5), pages 1-17, March.
    2. Louise Roos, 2013. "Modelling the impact of HIV/AIDS: A literature review," Centre of Policy Studies/IMPACT Centre Working Papers g-233, Victoria University, Centre of Policy Studies/IMPACT Centre.
    3. UN Economic Commission for Africa & United Nations Development Programme Regional Bureau for Africa & African Union & African Development Bank, 2016. "MDGs to Agenda 2063/SDGs Transition Report 2016: 2016Towards an integrated and coherent approach to sustainable development in Africa," UNDP Africa Reports 267640, United Nations Development Programme (UNDP).
    4. Anthony Mveyange & Christian Skovsgaard & Tine Lesner, 2015. "Does HIV/AIDS matter for economic growth in sub-Saharan Africa?," WIDER Working Paper Series 086, World Institute for Development Economic Research (UNU-WIDER).
    5. Anthony Mveyange & Christian Skovsgaard & Tine Lesner, 2015. "Does HIV/AIDS matter for economic growth in sub-Saharan Africa?," WIDER Working Paper Series wp-2015-086, World Institute for Development Economic Research (UNU-WIDER).

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