HIV/AIDS and Economic Growth: Empirical Evidence from Sub-Saharan Africa

Abstract

This study investigates the effects of the HIV and AIDS epidemic on economic growth in 42
sub-Saharan African countries using data spanning from 1990-2013. Unlike previous studies,
we use a longer data horizon and take the time lag effect of the epidemic’s incubation period
that is, after it might have developed to AIDS into consideration in our estimations. We
estimated an empirical growth equation within an augmented Solow model and applied the
dynamic system GMM estimator. The results suggest that current HIV prevalence rate –
associated with rising morbidity, has a negative effect on GDP per capita growth, conversely
AIDS – associated with higher mortality in addition to morbidity, increases per capita GDP
growth.