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HIV, Wages, and the Skill Premium

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  • Marinescu, Ioana E.

    ()
    (Harris School, University of Chicago)

Abstract

The HIV epidemic has dramatically decreased labor supply among prime-age adults in sub-Saharan Africa. Using within-country variation in regional HIV prevalence and a synthetic panel, I find that HIV significantly increases the capital-labor ratio in urban manufacturing firms. The impact of HIV on average wages is positive but imprecisely estimated. In contrast, HIV has a large positive impact on the skill premium. The impact of HIV on the wages of low skilled workers is insignificantly different from 0, and is strongly dampened by competition from rural migrants. The HIV epidemic disproportionately increases the incomes of high-skilled survivors, thus increasing inequality.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6438.

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Length: 44 pages
Date of creation: Mar 2012
Date of revision:
Handle: RePEc:iza:izadps:dp6438

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Keywords: labor supply; wages; health; AIDS; HIV; development;

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  1. Kalemli-Ozcan, Sebnem & Turan, Belgi, 2011. "HIV and fertility revisited," Journal of Development Economics, Elsevier, vol. 96(1), pages 61-65, September.
  2. George J. Borjas, 2009. "The Analytics of the Wage Effect of Immigration," NBER Working Papers 14796, National Bureau of Economic Research, Inc.
  3. Daniela Iorio & Raül Santaeulàlia-Llopis, 2011. "Education, HIV Status, and Risky Sexual Behavior: How Much Does the Stage of the HIV Epidemic Matter?," Working Papers 624, Barcelona Graduate School of Economics.
  4. Jane G Fortson, 2011. "Mortality Risk and Human Capital Investment: The Impact of HIV/AIDS in Sub-Saharan Africa," The Review of Economics and Statistics, MIT Press, vol. 93(1), pages 1-15, February.
  5. Harsha Thirumurthy & Markus Goldstein & Joshua Graff Zivin, 2005. "The Economic Impact of AIDS Treatment: Labor Supply in Western Kenya," Working Papers id:300, eSocialSciences.
  6. Juselius, Mikael, 2008. "Long-run relationships between labor and capital: Indirect evidence on the elasticity of substitution," Journal of Macroeconomics, Elsevier, vol. 30(2), pages 739-756, June.
  7. David Card, 1989. "The Impact of the Mariel Boatlift on the Miami Labor Market," NBER Working Papers 3069, National Bureau of Economic Research, Inc.
  8. Card, David, 2004. "Is the New Immigration Really So Bad?," IZA Discussion Papers 1119, Institute for the Study of Labor (IZA).
  9. James Habyarimana & Bekezela Mbakile & Cristian Pop-Eleches, 2010. "The Impact of HIV/AIDS and ARV Treatment on Worker Absenteeism: Implications for African Firms," Journal of Human Resources, University of Wisconsin Press, vol. 45(4), pages 809-839.
  10. Pierre, Gaëlle & Scarpetta, Stefano, 2004. "Employment Regulations through the Eyes of Employers: Do They Matter and How Do Firms Respond to Them?," IZA Discussion Papers 1424, Institute for the Study of Labor (IZA).
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  12. Daron Acemoglu & David H. Autor & David Lyle, 2002. "Women, War and Wages: The Effect of Female Labor Supply on the Wage Structure at Mid-Century," NBER Working Papers 9013, National Bureau of Economic Research, Inc.
  13. Emily Oster, 2007. "Routes of Infection: Exports and HIV Incidence in Sub-Saharan Africa," NBER Working Papers 13610, National Bureau of Economic Research, Inc.
  14. Günther, Isabel & Launov, Andrey, 2012. "Informal employment in developing countries," Journal of Development Economics, Elsevier, vol. 97(1), pages 88-98.
  15. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," NBER Working Papers 9755, National Bureau of Economic Research, Inc.
  16. Pratap, Sangeeta & Quintin, Erwan, 2006. "Are labor markets segmented in developing countries? A semiparametric approach," European Economic Review, Elsevier, vol. 50(7), pages 1817-1841, October.
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  18. Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March.
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