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AIDS and Income Distribution in Africa; A Micro-simulation Study for Côte d'Ivoire

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  • Denis Cogneau

    ()
    (DIAL, IRD, Paris)

  • Michael Grimm

    ()
    (University of Göttingen, Department of Economics, DIW and DIAL)

Abstract

We try to link the distribution of the AIDS epidemic over an African population with the distribution of income. For this purpose, we develop a demo-economic micro-simulation model able to simulate over a fifteen years period the impact of AIDS on household and individual incomes. The model is implemented using a rich set of Ivorian surveys. The results reveal the complexity of the interaction between demographic behavior and the income generating process. The AIDS epidemic seems to hurt more the lower middle class of the Ivorian population, that is the richest of the poor, and confronts survivors of an affected household to downward, although moderate, transitions through the distribution of income. In the absence of other macroeconomic impacts, the main effect of AIDS in Côte d'Ivoire is a shrinking of the size of the economy by around 6% after 15 years, leaving average income per capita, income inequality, and income poverty roughly unchanged. If now the impact on private health expenditures was taken into account, then no doubt that AIDS would clearly increase consumption poverty and decrease welfare. Moreover, if the prospects and patterns of labor demand were significantly affected by AIDS, then again both the overall and microeconomic impacts of the epidemic would appear more dramatic. In any case, the annual cost of antiretroviral treatment remains out of reach for almost all infected persons in Côte d'Ivoire. _________________________________ Nous essayons de relier la distribution de l'épidémie du SIDA sur une population africaine avec la distribution des revenus. A cette fin, nous développons un modèle de micro-simulation démo-économique capable de simuler sur une période de quinze ans l’impact du SIDA sur les revenus des ménages et des individus. Le modèle est mise en place en utilisant des enquêtes ivoiriennes variées. Les résultats des simulations sur une période de 15 ans révèlent la complexité des interactions entre les comportements démographiques et la formation des revenus. L'épidémie paraît toucher un peu plus souvent les moins pauvres des pauvres et confronte les survivants d’un ménage affecté à des baisses de revenu limitées. En l'absence des autres effets macro-économiques l'épidémie du SIDA entraînerait une réduction de la taille de l'économie de la Côte d'Ivoire de 6% en 15 ans, mais affecterait peu le revenu moyen par tête, les inégalités de revenu et la pauvreté. Au niveau micro-économique, la prise en compte des baisses d'activité et de productivité dues à la maladie conduirait évidemment à un diagnostic plus pessimiste en matière de pauvreté. Au niveau macro-économique, si la demande de travail était gravement affectée par l'épidémie, le diagnostic serait là encore aggravé. En tout état de cause, le coût des traitements anti-rétroviraux actuellement disponibles est hors de portée de presque toutes les personnes infectées en Côte d'Ivoire.

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Bibliographic Info

Paper provided by DIAL (Développement, Institutions et Mondialisation) in its series Working Papers with number DT/2002/15.

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Length: 38 pages
Date of creation: Dec 2002
Date of revision:
Handle: RePEc:dia:wpaper:dt200215

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Related research

Keywords: AIDS; Labor Supply; Income Distribution; Cote d’Ivoire; Offre de travail; Distribution du revenu.;

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References

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  1. Simon Dixon & Scott McDonald & Jennifer Roberts, 2001. "AIDS and economic growth in Africa: a panel data analysis," Journal of International Development, John Wiley & Sons, Ltd., vol. 13(4), pages 411-426.
  2. Wachter, Kenneth W. & Knodel, John E. & VanLandingham, Mark, 2003. "Parental bereavement: heterogeneous impacts of AIDS in Thailand," Journal of Econometrics, Elsevier, vol. 112(1), pages 193-206, January.
  3. David Evans & Edward Miguel, 2007. "Orphans and schooling in africa: a longitudinal analysis," Demography, Springer, vol. 44(1), pages 35-57, February.
  4. Anne Case & Christina Paxson & Joseph Ableidinger, 2002. "Orphans in Africa," NBER Working Papers 9213, National Bureau of Economic Research, Inc.
  5. Barnett, Tony & Blaikie, Piers, 1989. "AIDS and food production in East and Central Africa : A research outline," Food Policy, Elsevier, vol. 14(1), pages 2-6, February.
  6. Gary S. Becker, 1974. "A Theory of Social Interactions," NBER Working Papers 0042, National Bureau of Economic Research, Inc.
  7. 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.
  8. Silvia Sgherri & Maitland MacFarlan, 2001. "The Macroeconomic Impact of HIV/AIDS in Botswana," IMF Working Papers 01/80, International Monetary Fund.
  9. Magnac, Th, 1991. "Segmented or Competitive Labor Markets," Econometrica, Econometric Society, vol. 59(1), pages 165-87, January.
  10. Cuddington, John T. & Hancock, John D. & Rogers, Carol Ann, 1994. "A dynamic aggregative model of the AIDS epidemic with possible policy interventions," Journal of Policy Modeling, Elsevier, vol. 16(5), pages 473-496, October.
  11. Markus Haacker, 2002. "The Economic Consequences of HIV/AIDS in Southern Africa," IMF Working Papers 02/38, International Monetary Fund.
  12. 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.
  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. Kremer, Michael, 1996. "Integrating Behavioral Choice into Epidemiological Models of AIDS," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 549-73, May.
  15. Simon Gregson & Heather Waddell & Stephen Chandiwana, 2001. "School education and HIV control in sub-Saharan Africa: from discord to harmony?," Journal of International Development, John Wiley & Sons, Ltd., vol. 13(4), pages 467-485.
  16. David E. Bloom & Ajay S. Mahal, 1995. "Does the AIDS Epidemic Really Threaten Economic Growth?," NBER Working Papers 5148, National Bureau of Economic Research, Inc.
  17. Cuddington, John T. & Hancock, John D., 1994. "Assessing the impact of AIDS on the growth path of the Malawian economy," Journal of Development Economics, Elsevier, vol. 43(2), pages 363-368, April.
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Cited by:
  1. Agenor, Pierre-Richard & Chen, Derek H.C. & Grimm, Michael, 2004. "Linking representative household models with household surveys for poverty analysis : a comparison of alternative methodologies," Policy Research Working Paper Series 3343, The World Bank.
  2. Denis Cogneau & Anne-Sophie Robilliard, 2004. "Poverty Alleviation Policies in Madagascar: a Micro-Macro Simulation Model," Working Papers DT/2004/11, DIAL (Développement, Institutions et Mondialisation), revised Nov 2004.
  3. Denis Cogneau & Michael Grimm, 2006. "Socioeconomic status, sexual behavior, and differential AIDS mortality: evidence from Côte d’Ivoire," Population Research and Policy Review, Springer, vol. 25(4), pages 393-407, August.

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