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Economics 172 Issues in African Economic Development

Economics 172 Issues in African Economic Development. Lecture 10 February 16, 2006. Outline: Labor productivity impacts (Fox et al 2004) Parent death and school participation (Evans and Miguel 2005) Macroeconomic impacts of HIV/AIDS. Key questions in the study of HIV/AIDS.

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Economics 172 Issues in African Economic Development

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

  2. 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, 1997-2002 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, 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

  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? BecameNeverB-N OrphansOrphans 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 (0.03) Malaria in last month, 1998 0.40 0.39 0.01 (0.02) Household has a latrine, 1998 0.81 0.82 -0.02 (0.02) Household owns cattle, 1998 0.49 0.49 -0.00 (0.02) 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

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