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The Macroeconomics of Targeting: The Case of an Enduring Epidemic

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  • Bell, Clive
  • Gersbach, Hans

Abstract

What is the right balance among policy interventions in order to ensure economic growth over the long run when an epidemic causes heavy mortality among young adults? We argue that, in general, policies to combat the disease and promote education must be concentrated, in certain ways, on some subgroups of society, at first to the partial exclusion of others. This concentration involves what we term the macroeconomics of targeting. The central comparison is then between programs under which supported families enjoy the benefits of spending on health and education simultaneously (DT), and those under which the benefits in these two domains are sequenced (ST). When levels of human capital are uniformly low at the outbreak, DT is superior to ST if the subsequent mortality rate exceeds some threshold value. Outside aid makes DT more attractive; but DT restricts support to fewer families initially and so increases inequality.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5714.

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Date of creation: Jun 2006
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Handle: RePEc:cpr:ceprdp:5714

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Keywords: education support; epidemic diseases; health policies; HIV/AIDS; macroeconomics of targeting; poverty traps; single and double targeting;

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References

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  1. Yamano, Takashi & Jayne, Thomas S., 2004. "Working-Age Adult Mortality and Primary School Attendance in Rural Kenya," Food Security Collaborative Working Papers, Michigan State University, Department of Agricultural, Food, and Resource Economics 55159, Michigan State University, Department of Agricultural, Food, and Resource Economics.
  2. Leigh F. Johnson & Rob Dorrington, 2006. "Modelling the demographic impact of HIV/AIDS in South Africa and the likely impact of interventions," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 14(22), pages 541-574, June.
  3. David Evans & Edward Miguel, 2007. "Orphans and schooling in africa: a longitudinal analysis," Demography, Springer, Springer, vol. 44(1), pages 35-57, February.
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  5. Beegle, Kathleen & De Weerdt, Joachim & Dercon, Stefan, 2007. "The long-run impact of orphanhood," Policy Research Working Paper Series 4353, The World Bank.
  6. Gary S. Becker & Kevin M. Murphy & Robert Tamura, 1994. "Human Capital, Fertility, and Economic Growth," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 323-350 National Bureau of Economic Research, Inc.
  7. Ramona Schrepler, 2003. "Child Labor and Fertility," HEW, EconWPA 0310001, EconWPA, revised 26 Feb 2004.
  8. Sebnem Kalemli-Ozcan, 2006. "AIDS, "Reversal" of the Demographic Transition and Economic Development: Evidence from Africa," NBER Working Papers 12181, National Bureau of Economic Research, Inc.
  9. Galasso, Emanuela & Ravallion, Martin, 2005. "Decentralized targeting of an antipoverty program," Journal of Public Economics, Elsevier, vol. 89(4), pages 705-727, April.
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  11. Clive Bell & Shantayanan Devarajan & Hans Gersbach, 2006. "The Long-Run Economic Costs of aids: A Model with an Application to South Africa," World Bank Economic Review, World Bank Group, World Bank Group, vol. 20(1), pages 55-89.
  12. Scott McDonald & Jennifer Roberts, 2004. "Aids and Economic Growth: A Human Capital Approach," Working Papers 2004008, The University of Sheffield, Department of Economics, revised Aug 2004.
  13. Clive Bell & Shantayanan Devarajan & Hans Gersbach, 2003. "The long-run economic costs of AIDS : theory and an application to South Africa," Policy Research Working Paper Series 3152, The World Bank.
  14. Bell, Clive & Gersbach, Hans, 2001. "Child Labor and the Education of a Society," IZA Discussion Papers 338, Institute for the Study of Labor (IZA).
  15. Alwyn Young, 2005. "The Gift of the Dying: The Tragedy of Aids and the Welfare of Future African Generations," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 120(2), pages 423-466, May.
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Cited by:
  1. Jamsheed Shorish, 2007. "Welfare analysis of HIV/AIDS: Formulating and computing a continuous time overlapping generations policy model," The School of Economics Discussion Paper Series, Economics, The University of Manchester 0709, Economics, The University of Manchester.
  2. Fenichel, Eli P., 2013. "Economic considerations for social distancing and behavioral based policies during an epidemic," Journal of Health Economics, Elsevier, vol. 32(2), pages 440-451.

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