Copyright Page
© 2002 International Monetary Fund
WP/02/38
IMF Working Paper
African Department
The Economic Consequences of HIV/AIDS in Southern Africa
Prepared by Markus Haacker1
Authorized for distribution by Hugh Bredenkamp
February 2002
Abstract
The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.
The paper provides an analysis of the impact of HIV/AIDS on the health sector, public education, the supply of labor and the returns to training in nine Southern African countries. Drawing on the preceding sections, it assesses the impact of HIV/AIDS on per capita income in a neoclassical growth framework. HIV/AIDS affects per capita income mainly through its impact of human capital, as measured by the supply of experienced workers. Other factors include the impact on capital accumulation, on education, and on total factor productivity.
JEL Classification Numbers: H51, H52, H55, I10, I20, 040, 055
Keywords: HIV/AIDS, Health, Education, Government Expenditures, Economic Growth, Southern Africa
Author’s E-Mail Address: mhaacker@imf.org
Contents
I. Introduction
II. The Demographic Impact of HIV/AIDS in Southern Africa
III. The Impact on the Public Sector
Health
Education
Personnel Costs
Social Expenditure
Fiscal Balance
IV. The Impact on the Supply of Labour
V. The Impact on Companies
Direct Costs
Training and learning on the job
VI. Economic Growth and Per-Capita Income
A Theoretical Framework
The Impact of HIV/AIDS on Key Parameters
The “Closed-Economy Model”
The “Open-Economy Model”
VII. Conclusions
References
I would like to thank Tamim Bayoumi and Alan Whiteside for their useful comments on earlier versions of this paper.