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AIDS, longevity and long-run income

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  • Pedro Cavalcanti Ferreira

Abstract

This article studies the long-run impact of HIV/AIDS on per capita income and education. We focus on the disincentive to human capital accumulation given by shorter life span. We work with a continuous time overlapping generations model with education and saving decisions, calibrated for a cross-section of countries. The simulations predict that the most affected countries in Sub-Saharan Africa will be in future, on average, 20% poorer than they would be without AIDS. Schooling will decline in some cases such as Botswana, South Africa and Zambia by more than 40%. The impact of population decline was found to be irrelevant.

Suggested Citation

  • Pedro Cavalcanti Ferreira, 2013. "AIDS, longevity and long-run income," Applied Economics, Taylor & Francis Journals, vol. 45(15), pages 2117-2125, May.
    • Handle: RePEc:taf:applec:45:y:2013:i:15:p:2117-2125
    DOI: 10.1080/00036846.2012.654915
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    References listed on IDEAS

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    1. Barro, Robert J & Lee, Jong-Wha, 2001. "International Data on Educational Attainment: Updates and Implications," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 541-563, July.
    2. Mr. Markus Haacker, 2002. "The Economic Consequences of HIV/AIDS in Southern Africa," IMF Working Papers 2002/038, International Monetary Fund.
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