HIV, Wages, and the Skill Premium

Ioana Marinescu

No 6438, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The HIV epidemic has dramatically decreased labor supply among prime-age adults in sub-Saharan Africa. Using within-country variation in regional HIV prevalence and a synthetic panel, I find that HIV significantly increases the capital-labor ratio in urban manufacturing firms. The impact of HIV on average wages is positive but imprecisely estimated. In contrast, HIV has a large positive impact on the skill premium. The impact of HIV on the wages of low skilled workers is insignificantly different from 0, and is strongly dampened by competition from rural migrants. The HIV epidemic disproportionately increases the incomes of high-skilled survivors, thus increasing inequality.

Keywords: development; HIV; AIDS; health; wages; labor supply (search for similar items in EconPapers)
JEL-codes: I15 J22 J31 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2012-03
New Economics Papers: this item is included in nep-afr, nep-hea, nep-lab and nep-lma
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Published - published in: Journal of Health Economics, 2014, 37, 181-197

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Journal Article: HIV, wages, and the skill premium (2014)
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