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The Impact of AIDS Treatment on Savings and Human Capital Investment in Malawi

Victoria Baranov and Hans-Peter Kohler

American Economic Journal: Applied Economics, 2018, vol. 10, issue 1, 266-306

Abstract: Antiretroviral therapy (ART), a treatment for AIDS, is rapidly increasing life expectancy throughout sub-Saharan African countries affected by the AIDS epidemic. This change in life expectancy has potentially profound influences on life-cycle decisions. A longer life expectancy increases the value of human capital investment, while the effect on savings is theoretically ambiguous and life-cycle saving could increase or decrease. This paper uses spatial and temporal variation in ART availability to evaluate the impact of ART provision on savings and investment. We find that ART availability significantly increases savings, expenditures on education, and children's schooling, including among HIV-negative individuals who do not directly benefit from ART. These results are not driven by the direct health effects of treatment or reductions in caretaking responsibilities, but rather by reduced perceptions of mortality risk after ART has become available.

JEL-codes: D14 D15 I12 I15 J24 O12 (search for similar items in EconPapers)
Date: 2018
Note: DOI: 10.1257/app.20150369
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Working Paper: The Impact of AIDS Treatment on Savings and Human Capital Investment in Malawi (2015) Downloads
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American Economic Journal: Applied Economics is currently edited by Alexandre Mas

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Handle: RePEc:aea:aejapp:v:10:y:2018:i:1:p:266-306