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HIV, wages, and the skill premium


  • Marinescu, Ioana


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.

Suggested Citation

  • Marinescu, Ioana, 2014. "HIV, wages, and the skill premium," Journal of Health Economics, Elsevier, vol. 37(C), pages 181-197.
  • Handle: RePEc:eee:jhecon:v:37:y:2014:i:c:p:181-197
    DOI: 10.1016/j.jhealeco.2014.06.010

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    References listed on IDEAS

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    Cited by:

    1. Baranov, Victoria & Bennett, Daniel & Kohler, Hans-Peter, 2015. "The indirect impact of antiretroviral therapy: Mortality risk, mental health, and HIV-negative labor supply," Journal of Health Economics, Elsevier, vol. 44(C), pages 195-211.

    More about this item


    HIV; AIDS; Wages; Inequality; Development; Capital;

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development


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