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The Economic Impact of AIDS Treatment: Labor Supply in Western Kenya

  • Harsha Thirumurthy

    ()

    (Center for Global Development)

  • Joshua Graff Zivin

    ()

    (Columbia University)

  • Markus Goldstein

    ()

    (World Bank)

Registered author(s):

    Using longitudinal survey data from western Kenya, this paper estimates the economic impacts of antiretroviral treatment. The responses in two important outcomes are studied: (1) labor supply of adult AIDS patients receiving treatment; and (2) labor supply of patients’ household members. We find that within six months after treatment initiation, there is a 20 percent increase in patients’ likelihood of participating in the labor force and a 35 percent increase in weekly hours worked. Since patient health would continue to decline without treatment, these labor supply responses are underestimates of the impact of treatment on the treated. The upper bound of the treatment impact, based on plausible assumptions about the counterfactual, is considerably larger. The responses in household members’labor supply are heterogeneous, with young boys and women work significiantly less after initiation of treatment. The effects on child labor are important since they suggest potential schooling impacts from treatment.

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    File URL: http://www.econ.yale.edu/growth_pdf/cdp947.pdf
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    Paper provided by Economic Growth Center, Yale University in its series Working Papers with number 947.

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    Length: 47 pages
    Date of creation: Nov 2006
    Date of revision:
    Handle: RePEc:egc:wpaper:947
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    1. Michael Kremer, 2002. "Pharmaceuticals and the Developing World," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 67-90, Fall.
    2. Louis S. Jacobson & Robert J. LaLonde & Daniel Sullivan, 1992. "Earnings Losses of Displaced Workers," Upjohn Working Papers and Journal Articles 92-11, W.E. Upjohn Institute for Employment Research.
    3. Beegle, Kathleen, 2003. "Labor effects of adult mortality in Tanzanian households," Policy Research Working Paper Series 3062, The World Bank.
    4. Orley Ashenfelter & David Card, 1984. "Using the Longitudinal Structure of Earnings to Estimate the Effect of Training Programs," Working Papers 554, Princeton University, Department of Economics, Industrial Relations Section..
    5. Orley Ashenfelter & James Heckman, 1971. "The Estimation of Income and Substitution Effects in a Model of Family Labor Supply," Working Papers 402, Princeton University, Department of Economics, Industrial Relations Section..
    6. Clive Bell & Shantayanan Devarajan & Hans Gersbach, 2003. "The long-run economic costs of AIDS : theory and an application to South Africa," Policy Research Working Paper Series 3152, The World Bank.
    7. Jacoby, Hanan G & Skoufias, Emmanuel, 1997. "Risk, Financial Markets, and Human Capital in a Developing Country," Review of Economic Studies, Wiley Blackwell, vol. 64(3), pages 311-35, July.
    8. Kochar, Anjini, 1995. "Explaining Household Vulnerability to Idiosyncratic Income Shocks," American Economic Review, American Economic Association, vol. 85(2), pages 159-64, May.
    9. John Strauss & Duncan Thomas, 1998. "Health, Nutrition, and Economic Development," Journal of Economic Literature, American Economic Association, vol. 36(2), pages 766-817, June.
    10. Yamano, Takashi & Jayne, T. S., 2004. "Measuring the Impacts of Working-Age Adult Mortality on Small-Scale Farm Households in Kenya," World Development, Elsevier, vol. 32(1), pages 91-119, January.
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