Skip to Main Navigation

Further results on the macroeconomic effects of AIDS : the dualistic, labor - surplus economy (English)

This article generalizes and extends the earlier analyses of Cuddington (1993) and Cuddington and Hancock (forthcoming) by incorporating the presence of underemployment and dual labor markets - considerations that seem particularly important when assesssing the likely impact of AIDS in many African countries. The dual-economy simulations of the economic impact of AIDS using Tanzanian data suggest that the macroeconomic consequences of the epidemic are of the same order of magnitude as those obtained using a single-sector, full-employment model: gross domestic product (GDP) is 15 to 25 percent smaller by 2010 than it would have been wtihout AIDS, and per capita GDP is 0 to 10 percent smaller. The output loss from AIDS in the dual-economy framework is roughly the same as the output gain achievable through policies designed to increase labor market flexibility. The exercise is crude, but it suggests that meaningful efforts at economic reform in economies devastated by AIDS may at least ameliorate some of the negative economic effects of the epidemic, although they would certainly not offset its personal and social costs.

Details

  • Author

    Cuddington, John T.

  • Document Date

    1993/09/30

  • Document Type

    Journal Article

  • Report Number

    14078

  • Volume No

    1

  • Total Volume(s)

    1

  • Disclosure Date

    2010/07/01

  • Doc Name

    Further results on the macroeconomic effects of AIDS : the dualistic, labor - surplus economy

  • Keywords

    formal sector;per capita growth rate;informal sector;labor market adjustment;macroeconomic effect of aid;economic impact of aid;computable general equilibrium model;demographic impact of aid;efficiency of resource allocation;per capita income;aids epidemic;wage adjustment;labor demand;spread of aid;saving rate;formal sector employment;share of employment;national income account;informal sector employment;labor market efficiency;impact of policy;foreign capital inflow;change in employment;share of capital;health care system;aggregate production function;health care cost;amount of saving;share of labor;rise in mortality;medical care cost;absence from work;gross domestic product;capital market imperfection;unit labor;number of workers;spread of hiv;formal sector wage;economic reform program;informal sector worker;informal sector productivity;flexible labor market;unit of labor;Labor Market Flexibility;supply of labor;reduction in employment;bureau of statistic;labor supply;medical cost;aids prevalence;output loss;full-employment model;productivity differential;real wage;sticky wage;macroeconomic indicator;annual labor;medical expenditure;full employment;macroeconomic consequence;total output;depreciation rate;macroeconomic impact;capital stock;capital formation;demographic simulation;output level;labor share;parameter value;age cohort;empirical estimate;single-sector model;labor productivity;social cost;sectoral allocation;productivity differences;relative magnitude;capital accumulation;sensitivity analysis;market failure;fiscal burden;labor-demand schedule;marginal productivity;crude estimate;aids assessment;dualistic structure;forecast horizon;technical department;tax revenue;university press;real income;library system;macroeconomic level;income loss;informal production;AIDS patients;medical expense;concessional loan;official institutions;informal employment;adult population;adjustment dynamic;minimum restriction;capacity utilization;family enterprise;urban sector;household output;adjustment mechanism;idle capacity;domestic capital;national saving;medical consumption;foreign fund;initial value;data availability;negative effect;dual economy;average productivity;present analysis;urban service;smallholder agriculture;average age;average revenue;simulation analysis;employment effect;worker productivity;relative wage;work force;older worker;labor-demand curve;medical system;simulation result;Population Growth;simulation exercise;output growth;real gdp;productivity loss;individual variable;research assistance;estimate impact;wage level;productivity growth;Capital Inflows;aids costs;

Downloads

COMPLETE REPORT

Official version of document (may contain signatures, etc)

  • TXT*
  • Total Downloads** :
  • Download Stats
  • *The text version is uncorrected OCR text and is included solely to benefit users with slow connectivity.

Citation

Cuddington, John T.

Further results on the macroeconomic effects of AIDS : the dualistic, labor - surplus economy (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/185881468765036901/Further-results-on-the-macroeconomic-effects-of-AIDS-the-dualistic-labor-surplus-economy