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. 2009 Sep 16:12:18.
doi: 10.1186/1758-2652-12-18.

HIV/AIDS, growth and poverty in KwaZulu-Natal and South Africa: an integrated survey, demographic and economy-wide analysis

James Thurlow  1 , Jeff Gow, Gavin George
Affiliations

HIV/AIDS, growth and poverty in KwaZulu-Natal and South Africa: an integrated survey, demographic and economy-wide analysis

James Thurlow et al. J Int AIDS Soc. .

Abstract

Background: This paper estimates the economic impact of HIV/AIDS on the KwaZulu-Natal province and the rest of South Africa.

Methods: We extended previous studies by employing: an integrated analytical framework that combined firm surveys of workers' HIV prevalence by sector and occupation; a demographic model that produced both population and workforce projections; and a regionalized economy-wide model linked to a survey-based micro-simulation module. This framework permits a full macro-microeconomic assessment.

Results: Results indicate that HIV/AIDS greatly reduces annual economic growth, mainly by lowering the long-run rate of technical change. However, impacts on income poverty are small, and inequality is reduced by HIV/AIDS. This is because high unemployment among low-income households minimises the economic costs of increased mortality. By contrast, slower economic growth hurts higher income households despite lower HIV prevalence.

Conclusion: We conclude that the increase in economic growth that results from addressing HIV/AIDS is sufficient to offset the population pressure placed on income poverty. Moreover, incentives to mitigate HIV/AIDS lie not only with poorer infected households, but also with uninfected higher income households.Our findings reveal the substantial burden that HIV/AIDS places on future economic development in KwaZulu-Natal and South Africa, and confirms the need for policies to curb the economic costs of the pandemic.

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Figures

Figure 1
Figure 1
Channels' impact on final year poverty rate, 2025. Source: Provincial DCGE model results. Note: Outcomes are cumulative (for example, labour productivity includes the outcomes from labour supply). Horizontal bars show upper and lower bounds after assuming a 20% confidence interval around the additional growth rate resulting from each impact channel.
Figure 2
Figure 2
Regional growth incidence curves, 2002-2025. Source: Provincial DCGE model results.
See this image and copyright information in PMC

References

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