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Accounting for the effects of AIDS on growth in Sub-Saharan Africa

  • Paul Cahu

    ()

    (The World Bank - The World Bank)

  • Falilou Fall

    ()

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS)

In this paper, we first, perform a quantitative assessment of the impact of the HIV/AIDS epidemic on growth. Second, we precisely account for the effects of the epidemic on income per capita through human and physical capital accumulations, population and labor force. That is, we disentangle the effect on the different sources of short and long run growth. Using a dynamic panel of 46 Sub-Saharan African countries over the period 1981-2007, we show that HIV/AIDS has negative, significant and long-lasting effects on demography and growth. According to the estimates presented, GDP per working age population will be 12% lower in the long-run for the average African country than it should be if the epidemic had not spread out. However, the impact is huge for the countries experiencing a high prevalence rate. To tackle the endogeneity issue of HIV/AIDS, we provide a new series of HIV prevalence rate build from the estimation of the propagation dynamic of the epidemic.

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Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00609798.

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Date of creation: Jan 2011
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Handle: RePEc:hal:cesptp:halshs-00609798
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  1. Sebnem Kalemli-Ozcan & Belgi Turan & Chinhui Juhn, 2009. "HIV and Fertility in Africa: First Evidence from Population Based Surveys," 2009 Meeting Papers 650, Society for Economic Dynamics.
  2. Roland Pongou & Roberto Serrano, 2009. "A Dynamic Theory of Fidelity Networks with an Application to the Spread of HIV/AIDS," Working Papers 2009-2, Brown University, Department of Economics.
  3. Quamrul Ashraf & Ashley Lester & David Weil, 2008. "When Does Improving Health Raise GDP?," Working Papers 2008-7, Brown University, Department of Economics.
  4. Emily Oster, 2012. "Routes Of Infection: Exports And Hiv Incidence In Sub-Saharan Africa," Journal of the European Economic Association, European Economic Association, vol. 10(5), pages 1025-1058, October.
  5. Johnson, Paul & Durlauf, Steven N & Temple, Johnathan R. W., 2004. "Growth Econometrics," Vassar College Department of Economics Working Paper Series 61, Vassar College Department of Economics.
    • Durlauf, Steven N. & Johnson, Paul A. & Temple, Jonathan R.W., 2005. "Growth Econometrics," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 8, pages 555-677 Elsevier.
  6. Sebnem Kalemli-Ozcan, 2006. "AIDS, "Reversal" of the Demographic Transition and Economic Development: Evidence from Africa," NBER Working Papers 12181, National Bureau of Economic Research, Inc.
  7. Corrigan, Paul & Glomm, Gerhard & Mendez, Fabio, 2005. "AIDS crisis and growth," Journal of Development Economics, Elsevier, vol. 77(1), pages 107-124, June.
  8. Raouf, BOUCEKKINE & Bity, DIENE & Theophile, AZOMAHOU, 2006. "The Growth economics of epidemics," Discussion Papers (ECON - Département des Sciences Economiques) 2006021, Université catholique de Louvain, Département des Sciences Economiques.
  9. McDonald, Scott & Roberts, Jennifer, 2006. "AIDS and economic growth: A human capital approach," Journal of Development Economics, Elsevier, vol. 80(1), pages 228-250, June.
  10. Raouf Boucekkine & Rodolphe Desbordes & Hélène Latzer, 2009. "How do epidemics induce behavioral changes?," Journal of Economic Growth, Springer, vol. 14(3), pages 233-264, September.
  11. C Arndt & J D Lewis, 2000. "The Macro Implications of HIV/AIDS in South Africa: A Preliminary Assessment," South African Journal of Economics, Economic Society of South Africa, vol. 68(5), pages 380-392, December.
  12. Kalemli-Ozcan, Sebnem & Turan, Belgi, 2011. "HIV and fertility revisited," Journal of Development Economics, Elsevier, vol. 96(1), pages 61-65, September.
  13. 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.
  14. Chris Papageorgiou & Petia Stoytcheva, . "What Do We Know About the Impact of AIDS on Cross-Country Income So Far?," Departmental Working Papers 2005-01, Department of Economics, Louisiana State University.
  15. 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.
  16. Tavares, Jose & Wacziarg, Romain, 2001. "How democracy affects growth," European Economic Review, Elsevier, vol. 45(8), pages 1341-1378, August.
  17. David E. Bloom & Ajay S. Mahal, 1995. "Does the AIDS Epidemic Really Threaten Economic Growth?," NBER Working Papers 5148, National Bureau of Economic Research, Inc.
  18. Raul Santaeulalia-Llopis, 2008. "Aggregate Effect of AIDS on Development," 2008 Meeting Papers 533, Society for Economic Dynamics.
  19. Alwyn Young, 2005. "The Gift of the Dying: The Tragedy of Aids and the Welfare of Future African Generations," The Quarterly Journal of Economics, MIT Press, vol. 120(2), pages 423-466, May.
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