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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)

  • Falilou Fall

    ()
    (Centre d'Economie de la 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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    File URL: ftp://mse.univ-paris1.fr/pub/mse/CES2011/11009.pdf
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    Bibliographic Info

    Paper provided by Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne in its series Documents de travail du Centre d'Economie de la Sorbonne with number 11009.

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    Length: 42 pages
    Date of creation: Jan 2011
    Date of revision:
    Handle: RePEc:mse:cesdoc:11009

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    Related research

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

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    References

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    1. Sebnem Kalemli-Ozcan, 2012. "AIDS, “reversal” of the demographic transition and economic development: evidence from Africa," Journal of Population Economics, Springer, vol. 25(3), pages 871-897, July.
    2. Kalemli-Ozcan, Sebnem & Turan, Belgi, 2011. "HIV and fertility revisited," Journal of Development Economics, Elsevier, vol. 96(1), pages 61-65, September.
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