The Impact of AIDS on Income and Human Capital
AbstractThis paper studies the impact of HIV/AIDS on per capita income and education. It ex-plores two channels from HIV/AIDS to income that have not been sufficiently stressed bythe literature: the reduction of the incentives to study due to shorter expected longevity andthe reduction of productivity of experienced workers. In the model individuals live for threeperiods, may get infected in the second period and with some probability die of Aids beforereaching the third period of their life. Parents care for the welfare of the future generationsso that they will maximize lifetime utility of their dynasty. The simulations predict that themost affected countries in Sub-Saharan Africa will be in the future, on average, thirty percentpoorer than they would be without AIDS. Schooling will decline in some cases by forty percent.These gures are dramatically reduced with widespread medical treatment, as it increases thesurvival probability and productivity of infected individuals.
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Bibliographic InfoPaper provided by FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil) in its series Economics Working Papers (Ensaios Economicos da EPGE) with number 690.
Date of creation: 12 Feb 2009
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Other versions of this item:
- NEP-AFR-2009-02-22 (Africa)
- NEP-ALL-2009-02-22 (All new papers)
- NEP-DEV-2009-02-22 (Development)
- NEP-HEA-2009-02-22 (Health Economics)
- NEP-HRM-2009-02-22 (Human Capital & Human Resource Management)
- NEP-LAB-2009-02-22 (Labour Economics)
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