The Gift of the Dying: The Tragedy of AIDS and the Welfare of Future African Generations
This paper simulates the impact of the AIDS epidemic on future living
standards in South Africa. I emphasize two competing effects. On the one hand,
the epidemic is likely to have a detrimental impact on the human capital accumulation
of orphaned children. On the other hand, widespread community infection
lowers fertility, both directly, through a reduction in the willingness to
engage in unprotected sexual activity, and indirectly, by increasing the scarcity of
labor and the value of a woman’s time. I find that even with the most pessimistic
assumptions concerning reductions in educational attainment, the fertility effect
dominates. The AIDS epidemic, on net, enhances the future per capita consumption
possibilities of the South African economy.
Publication Date: 2005
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