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HIV, wages, and the skill premium

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  • Marinescu, Ioana

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.

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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    2. Bhalotra, Sonia & Rocha, Rudi & Facchini, Gabriel & Menezes, Aline, 2019. "Productivity effects of dengue in Brazil," ISER Working Paper Series 2019-04, Institute for Social and Economic Research.

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    More about this item

    Keywords

    HIV; AIDS; Wages; Inequality; Development; Capital;
    All these keywords.

    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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