The impact of AIDS on income and human capital

Pedro Ferreira, Marcelo Rodrigues dos Santos and Samuel de Abreu Pessôa

No 690, FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) from EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil)

Abstract: This paper studies the impact of HIV/AIDS on per capita income and education. It explores two channels from HIV/AIDS to income that have not been sufficiently stressed by the literature: the reduction of the incentives to study due to shorter expected longevity and the reduction of productivity of experienced workers. In the model individuals live for three periods, may get infected in the second period and with some probability die of Aids before reaching the third period of their life. Parents care for the welfare of the future generations so that they will maximize lifetime utility of their dynasty. The simulations predict that the most affected countries in Sub-Saharan Africa will be in the future, on average, thirty percent poorer than they would be without AIDS. Schooling will decline in some cases by forty percent. These figures are dramatically reduced with widespread medical treatment, as it increases the survival probability and productivity of infected individuals.

Date: 2009-02-12
New Economics Papers: this item is included in nep-afr, nep-dev, nep-hea, nep-hrm and nep-lab
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: THE IMPACT OF AIDS ON INCOME AND HUMAN CAPITAL (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:fgv:epgewp:690

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