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Accounting for the effects of AIDS on growth in Sub-Saharan Africa

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  • Paul Cahu

    ()
    (The World Bank - The World Bank)

  • Falilou Fall

    ()
    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)

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    Abstract

    In this paper, we first, perform a quantitative assessment of the impact of the HIV/AIDS epidemic on growth. Second, we precisely account for the effects of the epidemic on income per capita through human and physical capital accumulations, population and labor force. That is, we disentangle the effect on the different sources of short and long run growth. Using a dynamic panel of 46 Sub-Saharan African countries over the period 1981-2007, we show that HIV/AIDS has negative, significant and long-lasting effects on demography and growth. According to the estimates presented, GDP per working age population will be 12% lower in the long-run for the average African country than it should be if the epidemic had not spread out. However, the impact is huge for the countries experiencing a high prevalence rate. To tackle the endogeneity issue of HIV/AIDS, we provide a new series of HIV prevalence rate build from the estimation of the propagation dynamic of the epidemic.

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    Bibliographic Info

    Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00609798.

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    Date of creation: Jan 2011
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    Handle: RePEc:hal:cesptp:halshs-00609798

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    Related research

    Keywords: Health; AIDS epidemic; human capital; growth; Sub-Saharan Africa.;

    This paper has been announced in the following NEP Reports:

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    1. Juhn, Chinhui & Kalemli-Ozcan, Sebnem & Turan, Belgi, 2009. "HIV and Fertility in Africa: First Evidence from Population Based Surveys," IZA Discussion Papers 4473, Institute for the Study of Labor (IZA).
    2. Durlauf, Steven N. & Johnson, Paul A. & Temple, Jonathan R.W., 2005. "Growth Econometrics," Handbook of Economic Growth, Elsevier, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 8, pages 555-677 Elsevier.
    3. 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, Elsevier, vol. 43(2), pages 363-368, April.
    4. Corrigan, Paul & Glomm, Gerhard & Mendez, Fabio, 2005. "AIDS crisis and growth," Journal of Development Economics, Elsevier, Elsevier, vol. 77(1), pages 107-124, June.
    5. Raouf, BOUCEKKINE & Rodolphe, DESBORDES & Hélène, LATZER, 2008. "How do epidemics induce behavioral changes ?," Discussion Papers (ECON - Département des Sciences Economiques), Université catholique de Louvain, Département des Sciences Economiques 2008025, Université catholique de Louvain, Département des Sciences Economiques.
    6. Kalemli-Ozcan, Sebnem & Turan, Belgi, 2011. "HIV and fertility revisited," Journal of Development Economics, Elsevier, Elsevier, vol. 96(1), pages 61-65, September.
    7. Roberto Serrano & Roland Pongou, 2009. "A Dynamic Theory Of Fidelity Networks With An Application To The Spread Of Hiv/Aids," Working Papers, CEMFI wp2009_0909, CEMFI.
    8. Raouf, BOUCEKKINE & Bity, DIENE & Theophile, AZOMAHOU, 2006. "The Growth economics of epidemics," Discussion Papers (ECON - Département des Sciences Economiques), Université catholique de Louvain, Département des Sciences Economiques 2006021, Université catholique de Louvain, Département des Sciences Economiques.
    9. 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.
    10. 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.
    11. 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.
    12. Scott McDonald & Jennifer Roberts, 2004. "Aids and Economic Growth: A Human Capital Approach," Working Papers, The University of Sheffield, Department of Economics 2004008, The University of Sheffield, Department of Economics, revised Aug 2004.
    13. Chris Papageorgiou & Petia Stoytcheva, . "What Do We Know About the Impact of AIDS on Cross-Country Income So Far?," Departmental Working Papers, Department of Economics, Louisiana State University 2005-01, Department of Economics, Louisiana State University.
    14. Emily Oster, 2007. "Routes of Infection: Exports and HIV Incidence in Sub-Saharan Africa," NBER Working Papers 13610, National Bureau of Economic Research, Inc.
    15. Quamrul H. Ashraf & Ashley Lester & David N. Weil, 2009. "When Does Improving Health Raise GDP?," NBER Chapters, National Bureau of Economic Research, Inc, in: NBER Macroeconomics Annual 2008, Volume 23, pages 157-204 National Bureau of Economic Research, Inc.
    16. 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, Economic Society of South Africa, vol. 68(5), pages 380-392, December.
    17. 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.
    18. Tavares, Jose & Wacziarg, Romain, 2001. "How democracy affects growth," European Economic Review, Elsevier, Elsevier, vol. 45(8), pages 1341-1378, August.
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