Abstract
Despite the increasing rate of diffusion of effective therapies, the battle against HIV/AIDS in Sub-Saharan Africa (SSA) is far from being over. Three main challenges are that the epidemics might paralyse or reverse the fertility transition, the expansion of the resources needed to finance the fight against HIV, and the emerging resistance to anti-retroviral treatments. This research proposes a UGT-like model showing the complexity of the interplay amongst the (macro)economy, the epidemics, their endogenous feedback on mortality and fertility and the central role of policy actions aimed to fight HIV. The disease-induced increase in adult mortality can hamper economic development by its upward pressure on the precautionary demand for children and downward pressure on education. This can dramatically reduce physical and human capital accumulation.
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Notes
- 1.
On the demographic side, it should be recalled the work of Schoumaker (2009) pointing out that part of the fertility stall observed in SSA since the 2000 might partly be spurious due to data quality issues. Though clearly this is an important problem to be tackled in the future, we believe that the policy prescriptions of the present work are at all unaffected.
- 2.
We chose to define the public expenditure against HIV on a per worker basis rather than in per young terms (in line with the definitions of the other main variables used later in this work) for reasons of analytical tractability.
- 3.
We are aware that the assumption of perfect annuities does not perfectly describe the behaviour of intergenerational transmission of inheritance under uncertain survival in contexts such as SSA countries, as it is clearly well suited for settings where financial markets are adequately developed. However, the use of the alternative hypothesis of accidental bequests does not allow to characterise the behaviour of individual fertility and thus the dynamics of the physical to human capital ratio and the rate of HIV prevalence.
- 4.
The first order conditions define the optimal solution of the problem if and only if β tδγ < 1 (this condition is assumed to hold throughout the work). As β t beta depends on the prevalence rate of HIV, which in turn may vary depending on internal and external resources aimed at fighting the disease, in our analysis we will use the most restricting assumption δγ < 1.
- 5.
The issue of contraception, which has been the object of a recent interest in development studies about the fertility transition in industrialised countries (Bhattacharya and Chakraborty, 2017; Prettner and Strulik, 2017) is of interest in relation to the interplay between HIV/AIDS and the fertility transition in SSA. Indeed, SSA is also characterised as the only region in the world where low levels of contraception are persisting (Greenwood et al., 2013) thus representing a main factor of the permanence of high fertility (Cleland, 2009). Therefore, the awareness of the risk of HIV might have an important by product in terms of fertility control.
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Gori, L., Manfredi, P., Sodini, M. (2019). HIV/AIDS, Demography and Development: Individual Choices Versus Public Policies in SSA. In: Bucci, A., Prettner, K., Prskawetz, A. (eds) Human Capital and Economic Growth. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-21599-6_10
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