The Economic Impact of Aids Treatment: Labor Supply in Western Kenya

49 Pages Posted: 9 Mar 2006

See all articles by Harsha Thirumurthy

Harsha Thirumurthy

University of Pennsylvania; Center for Health Incentives and Behavioral Economics, University of Pennsylvania; University of Pennsylvania - Population Studies Center

Joshua Graff Zivin

Columbia University - Department of Health Policy and Management; National Bureau of Economic Research (NBER)

Markus Goldstein

World Bank

Multiple version iconThere are 2 versions of this paper

Date Written: December 2005

Abstract

Using longitudinal survey data collected in collaboration with a treatment program, this paper is the first to estimate the economic impacts of antiretroviral treatment in Africa. The responses in two important outcomes are studied: (1) labor supply of adult AIDS patients receiving treatment; and (2) labor supply of children and adults living in the patients' households. We find that within six months after the initiation of treatment, there is a 20 percent increase in the likelihood of the patient participating in the labor force and a 35 percent increase in weekly hours worked. Since patient health would continue to decline without treatment, these labor supply responses are underestimates of the impact of treatment on the treated. The upper bound of the treatment impact, which is based on plausible assumptions about the counterfactual, is considerably larger and also implies that the wage benefit from treatment is roughly equal to the costs of treatment provision. The responses in the labor supply of patients' household members are heterogeneous. Young boys and women work considerably less after initiation of treatment, while girls and men do not change their labor supply. The effects on child labor are particularly important since they suggest potential schooling impacts from treatment.

Suggested Citation

Thirumurthy, Harsha and Zivin, Joshua Graff and Goldstein, Markus P., The Economic Impact of Aids Treatment: Labor Supply in Western Kenya (December 2005). NBER Working Paper No. w11871. Available at SSRN: https://ssrn.com/abstract=875722

Harsha Thirumurthy

University of Pennsylvania ( email )

423 Guardian Dr
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Center for Health Incentives and Behavioral Economics, University of Pennsylvania ( email )

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United States

University of Pennsylvania - Population Studies Center ( email )

PA
United States

Joshua Graff Zivin (Contact Author)

Columbia University - Department of Health Policy and Management ( email )

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National Bureau of Economic Research (NBER)

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Markus P. Goldstein

World Bank ( email )

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Washington, DC 20433
United States

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