Investing in Hope: AIDS, Life Expectancy, and Human Capital Accumulation

Authors

Rui Huang, University of California-Berkeley
Lilyan E. Fulginiti, University of Nebraska-LincolnFollow
E. Wesley F. Peterson, University of Nebraska-LincolnFollow

Date of this Version

7-1-2003

Comments

Paper prepared for presentation at the Meetings of the International Association of Agricultural Economists, Durban, South Africa, August 2003. Copyright © 2003 Rui Hang, Lilyan Fulginiti and E. Wesley F. Peterson. Used by permission.

Abstract

A three period overlapping generations model is developed to investigate the impact of shorter life expectancy due to disease, on human capital investment decisions and income growth. This research is particularly relevant to Sub-Saharan Africa given the dramatic reduction in life expectancy due to HIV/AIDS and the potential lasting effects on growth. Our results indicate that as life expectancy shortens so does schooling inducing a lower growth rate of income. These relationships are even more pronounced for the African continent than for the rest of the world.