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AIDS, "Reversal" of the Demographic Transition and Economic Development: Evidence from Africa

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Sebnem Kalemli-Ozcan

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Abstract

Theoretical models of demographic transition imply that fertility declines as a response to a decline in mortality. These models take their cue from the historical pattern of the demographic transition, which suggests that fertility declines follow mortality declines, followed by a rise in human capital accumulation and economic growth. The HIV/AIDS epidemic is a shock to mortality that threatens to reverse this path. Using country, and regional level data, this paper investigates the effect of HIV/AIDS on fertility rates from a panel of African countries during 1985-2000. Results differ depending on the estimation method. Cross-sectional estimates based on country and regional level data from Africa suggest a positive effect of HIV/AIDS on fertility both in OLS and in IV frameworks. Panel estimates show mixed results depending on the HIV/AIDS variable used, yielding a zero effect in most of the specifications. My results contrast with those of Young (2007), who find a strong negative effect of the epidemic on fertility using similar data from Africa and employing a panel estimation. I reconcile the different results by showing that his estimates also turns out to be statistically insignificant, once the standard errors are appropriately clustered.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12181.

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Date of creation: May 2006
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Handle: RePEc:nbr:nberwo:12181

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Find related papers by JEL classification:
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
I12 - Health, Education, and Welfare - - Health - - - Health Production
J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends and Forecasts
J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Markus Haacker, 2002. "The Economic Consequences of HIV/AIDS in Southern Africa," IMF Working Papers 02/38, International Monetary Fund. [Downloadable!]
  2. Rodrigo R. Soares, 2004. "Mortality Reductions, Educational Attainment, and Fertility Choice," Econometric Society 2004 North American Winter Meetings 9, Econometric Society. [Downloadable!]
    Other versions:
  3. Hoyt Bleakley & Fabian Lange, 2009. "Chronic Disease Burden and the Interaction of Education, Fertility, and Growth," The Review of Economics and Statistics, MIT Press, vol. 91(1), pages 52-65, 09. [Downloadable!] (restricted)
  4. Chris Papageorgiou & Petia Stoytcheva, . "What Do We Know About the Impact of AIDS on Cross-Country Income So Far?," Departmental Working Papers 2005-01, Department of Economics, Louisiana State University. [Downloadable!]
  5. Sebnem Kalemli-Ozcan, 2002. "Does the Mortality Decline Promote Economic Growth?," Macroeconomics 0212008, EconWPA. [Downloadable!]
    Other versions:
  6. Rebecca L. Thornton, 2008. "The Demand for, and Impact of, Learning HIV Status," American Economic Review, American Economic Association, vol. 98(5), pages 1829-63, December. [Downloadable!]
  7. Kalemli-Ozcan, Sebnem & Ryder, Harl E. & Weil, David N., 2000. "Mortality decline, human capital investment, and economic growth," Journal of Development Economics, Elsevier, vol. 62(1), pages 1-23, June. [Downloadable!] (restricted)
  8. Cohen, Barney, 1998. "The emerging fertility transition in sub-Saharan Africa," World Development, Elsevier, vol. 26(8), pages 1431-1461, August. [Downloadable!] (restricted)
  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, vol. 120(2), pages 423-466, May.
  10. Pritchett, Lant H. & DEC, 1994. "Desired fertility and the impact of population policies," Policy Research Working Paper Series 1273, The World Bank. [Downloadable!]
  11. Matthias Doepke, 2005. "Child mortality and fertility decline: Does the Barro-Becker model fit the facts?," Journal of Population Economics, Springer, vol. 18(2), pages 337-366, 06. [Downloadable!] (restricted)
    Other versions:
  12. Daron Acemoglu & Simon Johnson, 2006. "Disease and Development: The Effect of Life Expectancy on Economic Growth," NBER Working Papers 12269, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  13. Kalemli-Ozcan, Sebnem, 2003. "A stochastic model of mortality, fertility, and human capital investment," Journal of Development Economics, Elsevier, vol. 70(1), pages 103-118, February. [Downloadable!] (restricted)
    Other versions:
  14. Michael Kremer, 1996. "Integrating Behavioral Choice into Epidemiological Models of the AIDS Epidemic," NBER Working Papers 5428, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  15. Hoyt Bleakley, 2003. "Disease and Development: Evidence from the American South," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 376-386, 04/05. [Downloadable!] (restricted)
  16. Chakraborty, Shankha, 2004. "Endogenous lifetime and economic growth," Journal of Economic Theory, Elsevier, vol. 116(1), pages 119-137, May. [Downloadable!] (restricted)
    Other versions:
  17. repec:rus:hseeco:71105 is not listed on IDEAS
  18. Corrigan, Paul & Glomm, Gerhard & Mendez, Fabio, 2005. "AIDS crisis and growth," Journal of Development Economics, Elsevier, vol. 77(1), pages 107-124, June. [Downloadable!] (restricted)
  19. Bloom, David E. & Mahal, Ajay S., 1997. "Does the AIDS epidemic threaten economic growth?," Journal of Econometrics, Elsevier, vol. 77(1), pages 105-124, March. [Downloadable!] (restricted)
  20. Emily Oster, 2005. "Sexually Transmitted Infections, Sexual Behavior, and the HIV/AIDS Epidemic," The Quarterly Journal of Economics, MIT Press, vol. 120(2), pages 467-515, May.
  21. Michele Boldrin & Larry E. Jones, 2002. "Mortality, Fertility, and Saving in a Malthusian Economy," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(4), pages 775-814, October. [Downloadable!] (restricted)
  22. Ferreira, Pedro Cavalcanti Gomes & Pessoa, Samuel de Abreu, 2003. "The Long Run Economic Impact of AIDS," Economics Working Papers (Ensaios Economicos da EPGE) 475, Graduate School of Economics, Getulio Vargas Foundation (Brazil). [Downloadable!]
  23. Sah, Raaj Kumar, 1991. "The Effects of Child Mortality Changes on Fertility Choice and Parental Welfare," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 582-606, June. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. David, Antonio C., 2007. "HIV/AIDS and social capital in a cross-section of countries," Policy Research Working Paper Series 4263, The World Bank. [Downloadable!]
  2. Raouf, BOUCEKKINE, 2007. "A theory of dynamics and inequalities under epidemics," Discussion Papers (ECON - Département des Sciences Economiques) 2007022, Université catholique de Louvain, Département des Sciences Economiques. [Downloadable!]
    Other versions:
  3. Emily Oster, 2007. "HIV and Sexual Behavior Change: Why Not Africa?," NBER Working Papers 13049, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Amparo Castello-Climent & Rafael Domenech, 2006. "Human Capital Inequality, Life Expectancy and Economic Growth," Working Papers 0604, International Economics Institute, University of Valencia. [Downloadable!]
    Other versions:
  5. Peter Lorentzen & John McMillan & Romain Wacziarg, 2008. "Death and development," Journal of Economic Growth, Springer, vol. 13(2), pages 81-124, June. [Downloadable!] (restricted)
    Other versions:
  6. Emily Oster, 2007. "Routes of Infection: Exports and HIV Incidence in Sub-Saharan Africa," NBER Working Papers 13610, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Clive Bell & Hans Gersbach, 2006. "Growth and Enduring Epidemic Diseases," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  8. Matteo Cervellati & Uwe Sunde, 2008. "The Economic and Demographic Transition, Mortality, and Comparative Development," University of St. Gallen Department of Economics working paper series 2008 2008-21, Department of Economics, University of St. Gallen. [Downloadable!]
  9. Rocha, Romero & Soares, Rodrigo R., 2009. "Evaluating the Impact of Community-Based Health Interventions: Evidence from Brazil's Family Health Program," IZA Discussion Papers 4119, Institute for the Study of Labor (IZA). [Downloadable!]
  10. Bell, Clive & Bruhns, Ramona & Gersbach, Hans, 2006. "Economic growth, education, and AIDS in Kenya : a long-run analysis," Policy Research Working Paper Series 4025, The World Bank. [Downloadable!]
  11. Raouf BOUCEKKINE & Jean-Pierre LAFFARGUE, 2009. "On the Distributional Consequences of Epidemics," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2009012, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES). [Downloadable!]
    Other versions:
  12. Sambit Bhattacharyya, 2008. "Root Causes of African Underdevelopment," Departmental Working Papers 2008-16, Australian National University, Economics RSPAS. [Downloadable!]
    Other versions:
  13. Raouf Boucekkine & Rodolphe Desbordes & Hélène Latzer, 2007. "How do epidemics induce behavioral changes?," Working Papers 2007_25, Department of Economics, University of Glasgow. [Downloadable!]
    Other versions:
  14. Cervellati, Matteo & Sunde, Uwe, 2009. "Life Expectancy and Economic Growth: The Role of the Demographic Transition," IZA Discussion Papers 4160, Institute for the Study of Labor (IZA). [Downloadable!]
  15. Azomahou, Theophile & Diene, Bity & Soete, Luc, 2009. "The role of consumption and the financing of health investment under epidemic shocks," UNU-MERIT Working Paper Series 006, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
  16. David, Antonio C. & Li, Carmen A., 2008. "Exploring the links between HIV/AIDS, social capital, and development," Policy Research Working Paper Series 4679, The World Bank. [Downloadable!]
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