1. Economics 172 Issues in African Economic Development
Lecture 10
February 16, 2006

2. 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

3. 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

4. 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,
Economics 172

5. 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,
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

6. Economics 172

7. Economics 172

8. Economics 172

9. 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

10. How do orphans and non-orphans compare?
Became Never B-N
Orphans Orphans
1997 School participation
(0.03)
1998 School participation
(0.01)
Weight-for-age (Z),
Malaria in last month,
(0.02)
Household has a latrine,
Household owns cattle,
Economics 172

11. Economics 172

12. 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

13. 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

14. 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

15. Whiteboard #1
Economics 172

16. Whiteboard #2
Economics 172

17. Whiteboard #3
Economics 172

18. Whiteboard #4
Economics 172

19. Whiteboard #5
Economics 172

20. Map of Africa
Economics 172