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AIDS, longevity and long-run income

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This article studies the long-run impact of HIV/AIDS on per capita income and education. We focus on the disincentive to human capital accumulation given by shorter life span. We work with a continuous time overlapping generations model with education and saving decisions, calibrated for a cross-section of countries. The simulations predict that the most affected countries in Sub-Saharan Africa will be in future, on average, 20% poorer than they would be without AIDS. Schooling will decline in some cases such as Botswana, South Africa and Zambia by more than 40%. The impact of population decline was found to be irrelevant.

Keywords: Africa; HIV/AIDS; I10; O11; O40; long-run output; schooling

Document Type: Research Article


Affiliations: Graduate School of Economics, Fundação Getulio Vargas, Praia de Botafogo 190, 1125Rio de Janeiro,RJ 22253-900, Brazil

Publication date: May 1, 2013

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