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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:AIDS, economic growth and income distribution in South Africa
Author:Nattrass, NicoliISNI
Periodical:South African Journal of Economics
Geographic term:South Africa
Subjects:economic models
economic development
income distribution
External link:https://onlinelibrary.wiley.com/doi/10.1111/j.1813-6982.2003.tb00080.x/pdf
Abstract:The understanding of the economic impact of the AIDS pandemic in South Africa is sketchy at best. Macroeconomic modellers are divided over whether the overall impact of the epidemic will be to raise or lower per capita GDP, and there are no studies of the impact of AIDS on income distribution. This paper provides an overview of selected recent macroeconomic research on the impact of AIDS in South Africa. The key objective is to explain how different macroeconomic models arrive at different results and to point to the limitations of these models - particularly, their failure to take into account the dynamic adjustments suggested by firm-level studies. It is argued that the recent sharp decline in the cost of antiretroviral medication will probably result in more firms providing such medication to their workers (particularly skilled workers). If so, then the economic impact of AIDS will be less substantial than that projected by the main macroeconomic models. However, the distributional implications are unsettling. If firms continue to decrease their reliance on unskilled labour, poor households will find themselves disadvantaged, while, conversely, relatively skilled workers could benefit from greater employment opportunities. Bibliogr., notes, ref. [ASC Leiden abstract]