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Does the AIDS Epidemic Really Threaten Economic Growth?

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  • David E. Bloom
  • Ajay S. Mahal

Abstract

This study examines the claim that the AIDS epidemic will slow the pace of economic growth. We do this by examining the association, across fifty-one developing and industrial countries for which we were able to assemble data, between changes in the prevalence of AIDS and the rate of growth of GDP per capita. Our analysis uses well- established empirical growth models to control for a variety of factors possibly correlated with AIDS prevalence that might also influence growth. We also account for possible simultaneity in the relationship between AIDS and economic growth. Our main finding is that the AIDS epidemic has had an insignificant effect on the growth rate of per capita income, with no evidence of reverse causality. We also find evidence that the insignificant effect of AIDS on income per capita is qualitatively similar to an insignificant effect on wages of the Black Death in England and France during the Middle Ages and an insignificant effect on output per capita of influenza in India during 1918-19.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5148.

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Date of creation: Jun 1995
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Handle: RePEc:nbr:nberwo:5148

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References

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  1. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," NBER Working Papers 3120, National Bureau of Economic Research, Inc.
  2. David E. Bloom & Richard B. Freeman, 1986. "Population Growth, Labor Supply, and Employment in Developing Countries," NBER Working Papers 1837, National Bureau of Economic Research, Inc.
  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, vol. 43(2), pages 363-368, April.
  4. Avner Ahituv & V. Joseph Hotz & Tomas Philipson, 1994. "Will the AIDS Epidemic be Self-Limiting? Evidence on the Responsiveness of the Demand for Condoms to the Prevalence of AIDS," Working Papers 9401, Harris School of Public Policy Studies, University of Chicago.
  5. Mankiw, N Gregory & Romer, David & Weil, David N, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 407-37, May.
  6. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, vol. 82(4), pages 942-63, September.
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Citations

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Cited by:
  1. Muysken,Joan & Yetkiner,I. Hakan & Ziesemer,Thomas, 1999. "Health, Labour Productivity and Growth," Research Memoranda 028, Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology.
  2. Michael Grimm & Denis Cogneau, 2004. "AIDS and income distribution in Africa. A micro-simulation study for Cˆote d’Ivoire," Labor and Demography 0408006, EconWPA.
  3. 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.
  4. Michael Kremer, 1996. "Integrating Behavioral Choice into Epidemiological Models of the AIDS Epidemic," NBER Working Papers 5428, National Bureau of Economic Research, Inc.
  5. Robalino, David A. & Jenkins, Carol & El Maroufi, Karim, 2002. "Risks and macroeconomic impacts of HIV/AIDS in the Middle East and North Africa : why waiting to intervene can be costly," Policy Research Working Paper Series 2874, The World Bank.
  6. Desmond, Christopher & Greener, Robert, 2003. "The strategic use and potential demand for an HIV vaccine in Southern Africa," Policy Research Working Paper Series 2977, The World Bank.
  7. Muysken,Joan & Weel,Bas,ter, 1999. "Overeducation, Job Competition and Unemployment," Research Memoranda 030, Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology.
  8. Channing Arndt & Jeffrey D. Lewis, 2001. "The HIV|AIDS pandemic in South Africa: sectoral impacts and unemployment," Journal of International Development, John Wiley & Sons, Ltd., vol. 13(4), pages 427-449.
  9. Arndt, Channing, 2002. "HIV/AIDS, human capital, and economic prospects for Mozambique," TMD discussion papers 88, International Food Policy Research Institute (IFPRI).

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