Economics 172 Issues in African Economic Development Lecture 10 February 16, 2006
Labor productivity impacts (Fox et al 2004) Outline: Labor productivity impacts (Fox et al 2004) Parent death and school participation (Evans and Miguel 2005) Macroeconomic impacts of HIV/AIDS Economics 172
Key questions in the study of HIV/AIDS (0) Characterizing the extent of the problem (today) (1) What impact does HIV/AIDS have on economic development in Africa? (2) Why does HIV/AIDS continue to spread in Africa? (3) What can / should public policy do about HIV/AIDS? Economics 172
HIV/AIDS and labor productivity in Kenya Fox et al (2004) study the impact of HIV/AIDS illness on labor productivity on tea plantations in Kenya, 1997-2002 Economics 172
HIV/AIDS and labor productivity in Kenya Fox et al (2004) study the impact of HIV/AIDS illness on labor productivity on tea plantations in Kenya, 1997-2002 They compare the labor productivity – the kilograms of tea leaves picked per day – of workers who became sick with HIV/AIDS during the study period to workers who remained healthy The total sample is 271 workers. 54 died or retired due to HIV/AIDS Economics 172
Economics 172
Economics 172
Economics 172
Parent death and school participation in Kenya Evans and Miguel (2005) study the impact of parent death on school participation among primary school children in Kenya (using the deworming project dataset) Parent death leads to a drop of 5-6 percentage points in school participation Impacts are particularly negative following maternal deaths, and for worse students Economics 172
How do orphans and non-orphans compare? Became Never B-N Orphans Orphans 1997 School participation 0.83 0.81 0.02 (0.03) 1998 School participation 0.92 0.92 0.00 (0.01) Weight-for-age (Z), 1998 -1.40 -1.45 0.05 Malaria in last month, 1998 0.40 0.39 0.01 (0.02) Household has a latrine, 1998 0.81 0.82 -0.02 Household owns cattle, 1998 0.49 0.49 -0.00 Economics 172
Economics 172
Young (2005) on positive growth impacts Alwyn Young (2005) shows in a macroeconomic model and simulation that AIDS deaths could lead to faster economic growth, at least in theory Economics 172
Young (2005) on positive growth impacts Alwyn Young (2005) shows in a macroeconomic model and simulation that AIDS deaths could lead to faster economic growth, at least in theory The key driving force in the model is the drop in fertility due to the HIV/AIDS epidemic from the following causes: Real wages rise More women enter the labor force More safe sex Lower fertility HIV+ women may find it more difficult to conceive Economics 172
Young (2005) on positive growth impacts Alwyn Young (2005) shows in a macroeconomic model and simulation that AIDS deaths could lead to faster economic growth, at least in theory The key driving force in the model is the drop in fertility due to the HIV/AIDS epidemic from the following causes: Real wages rise More women enter the labor force More safe sex Lower fertility HIV+ women may find it more difficult to conceive Overall HIV/AIDS will increase real wages 5-10% over the next 60 years in South Africa (in his simulation) Economics 172
Whiteboard #1 Economics 172
Whiteboard #2 Economics 172
Whiteboard #3 Economics 172
Whiteboard #4 Economics 172
Whiteboard #5 Economics 172
Map of Africa Economics 172