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Impact Of HIV/AIDS In Lower Developed Countries

Paper Type: Free Essay Subject: Economics
Wordcount: 2143 words Published: 27th Apr 2017

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The area which I will research on, for my dissertation will be how HIV/AIDS has affected the economy. The main focus would be on Africa, which has experienced the biggest impact in their economies due to HIV/AIDS. I will also be looking at other lower developed countries and how HIV/AIDS has affected them directly and also indirectly. This topic is very important because it has impacted the people of lower developed countries, as well as the economies. I will also be looking at what can be done to improve the state of these economies and will look at what the future holds for these countries.

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HIV/AIDS has an effect on basically everything in the lower developed countries; it has effected what policies have been drawn up to the GDP per capita. The main reason why I have chosen this topic is because it affects everything in the country. HIV/AIDS has been one of the biggest issues in the world. The research of this area is important because it has been a big issue in the 20th century and the there is no cure to this problem, there are ways to slow down the disease but there is no cure or vaccine. AIDS is considered to be a pandemic, it has been estimated in 2007 that 33.2 million people are living with this problem. AIDS has killed an estimated 2.1 million people and sub Saharan Africa accounts to two thirds of this. This has an impact on economic growth and has killed human capital.

Research question or main hypotheses – what is the specific question you seek to answer? [100 words]

The research question for my proposal which I will be discussing will be:

The economic impact of HIV/AIDS in lower developed countries

The main hypothesis can be broken down into several questions:

What are the effects on GDP?

What are the effects on inflation?

What has been done to help minimize the impact?

What has been the effect on poverty?

What impact has it had on economic growth?

Are there any signs of economic growth?

Theoretical Literature – what economic theory/theories form the basis to your research topic? [300 words]

Macroeconomic theories will be the main theory which will relate to my topic. Macroeconomic is very important and substantial to regions that have been heavily impacted by HIV/AIDS like sub-Saharan Africa. The policies are controversial for example whether costly antiretroviral drugs should be targeted to people of economically productive groups.

HIV/AIDS has become a pandemic which has had an impact on labour supply because of a rise in morbidity and mortality. This has caused losses of skills in important sectors of the labour market.

Long periods of absence due to HIV/AIDS reduce labour productivity. One such review has shown that the annual cost relating with this illness and reduced productivity due to HIV/AIDS ranged from $17 per employee to $300. These costs have a big impact and reduce profits and competitiveness. Others affected would be the government which its income would be reduced, as tax revenue falls, the government is then pressured to raise their spending to tackle the increasing prevalence of aids, this would potentially cause fiscal crisis.

Termed computable general equilibrium models have helped estimate the effects of the pandemic across sectors. This has been found more useful than regression analysis when predicting greater economic effects. This has also helped find significant variations across industrial sectors.

Empirical & Contextual Literature – an overview and evaluation of 3-4 important academically-credible sources relating to your research area (e.g. refereed journal articles, research-based books, departmental working papers, government/NGO reports etc.) which illustrate the debate/issue of your topic. Use only appropriate academic sources. Make sure you show how their approach, findings or conclusions relate to your topic area; do not simply describe them. [1000 words]

The impact of HIV and AIDS on Africa’s economic development

In this journal, it discusses the impact HIV/AIDS has had on Africa’s economic development. This will help me in my dissertation because it discusses the relevant areas. It discusses what economic theories it affects and how it affects the work place and looks at the bigger impact of this in the economy. HIV/AIDS has reduced the average national economic growth rate of Africa by 2-4% a year.

The journal starts discussing macroeconomics and how policies can affect HIV/AIDS in Africa. Expensive antiretroviral drugs are discussed whether or not it should be targeted to ‘economically productive groups of people’. It looks at the economic affect in the labour market and looks at the impact it has in the sectors of the economy. Economic theory predicts that the pandemic HIV/AIDS has an effect on the labour markets; it reduces labour supply and productivity, increases imports and reduces exports.

Quantifying the impact to see the economic performance, to simplify these economists looks at either average income or GDP per capita. The literature found in this journal show 11 studies that attempt to quantify the effect of HIV/AIDS on GDP per capita. These studies have shown a general view on regression analysis to estimate the impact on ‘prevalence’ of HIV, on the rate of growth of GDP whilst they would control the growth from other factors for example nutrition levels. The results of this show that the growth for GDP per capita will be negative

The economic models in this journal show that the HIV/AIDS pandemic will have a big impact in the economy in sub-Saharan Africa and will need international economic assistance. To limit the economic impact of the pandemic nations that are affected would have to develop tailored policies to the needs of their own country. The policies would include prevention and treatment programmes, also could include economic measures such as targeted training skills for a specific area in the industry. The section discusses how the education sector has an impact on HIV/AIDS on the quality of education, which is measure by student-teacher ratios.

The economic consequences of HIV/AIDS in Southern Africa

The book looks at the economic consequence of Southern Africa. It discusses economic as well as social disruptions. The book looks into detail about the fiscal implications and the effects on economic growth. The book would help me look into private sectors and the public sectors in the economy of Africa and look at the impacts and the future targets that the economies should strive for.

Section 3 part of the book discusses the impact the implications of HIV/AIDS has on the public sector, focusing on the areas of the educational sector, personal costs, general government revenue and focuses thoroughly on the health sector. In the health sector, as health service increases, the health personnel are also affected by the epidemic as well. Section 3 in the book also looks at improving access to HAARTs (highly active antiretroviral treatments).

Section 4 and 5 of the book discusses the impact HIV/AIDS has on the private sector and also the supply of labour. HIV/AIDS has an influence on size, the working-age population and also the age structure. Owing to a rise in mortality rates, experienced worker become scarce, and the returns to training decline. Deaths and sickness of workers will cause disruption to the production process which would result in reduced productivity. In this section it’s said that the formal sector, the costs of death and medical related benefits would increase.

The book discusses in section 6 a brief summary on topics covered in previous section, in this chapter it addresses the overall impact of HIV/AIDS has on per capita income and economic growth. This is based on neoclassical growth framework, and also focuses on variables such as savings, human capital, population growth and productivity. The main factor of the impact of HIV/AIDS on per capita income are the fall in human capital which is measures as workers’ experience, and the reply from investors to a fall in the return to capital.

HIV/AIDS, human capital, and economic growth prospects for Mozambique

This journal discusses the implications death from HIV/AIDS has on economic growth prospects. It looks at the country Mozambique more in detail and gives a brief history on when HIV/AIDS had become a problem. It gives evidence on why it has stagnated the economy and what policies have been implemented to slow down the effects.

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The paper starts of with discussing the economic growth prospects of Mozambique and how it is planning on boosting the economy. Human capital accumulation is looked at thoroughly and through education it receives special attention. Education and human capital transition matrices are estimated by the use of a ‘minimum cross entropy approach’. HIV/AIDS is thought to slower the rate of human capital accumulation. By looking at the ‘dynamic computable general equilibrium approach’, a decreased rate of physical and human capital accumulation are shown to heavily link with changes that is biased towards human and physical approach. Even though this journal discusses only Mozambique this would help me see what improvements other nations could do with policies and use Mozambique as an example of a nation with growth prospects.

Method and data to be used – what method(s) are appropriate to answering your question/hypotheses? What data will you use? Where is it from? How will you analyse it? [250 words]

I will be looking to break down the main question into smaller questions and make sure I have answered it very thoroughly. I will be looking at various angles and use more than one piece of data to make the judgement on how HIV/AID has impacted the economy.

I will be looking to get stats on HIV/AIDS deaths and how many people are currently living with it. I will be then using this information to show what impact it has done to the population and what have been the effects because of this. Life expectancy is very important so it will be important to see what effects life expectancy has on the economy and whether life expectancy has been affected by HIV/AIDS.

GDP data will be used to look at the lower developed countries GDP and see if there is a link on whether countries that have been affected by HIV/AIDS have low GDP. This will help me see if there has been a big impact on the economy.

Proposed chapter structure – a logical listing of the chapter headings and brief description of likely contents to illustrate the organisation of your dissertation. [100 words]


In this chapter I will be discussing the background history of HIV/AIDS; other things that will be included in this chapter will be the hypothesis and the relevance of the topic.


This chapter will include the stats for poverty and how it has affected people’s lives. I will also look at what is being done for the people that are affected and how much it is costing each year to help the people affected.


The discussion of GDP will be very important in this chapter and will include all the stats for the countries affected by HIV/AIDS. I will also be looking at what other impacts there has been on the economy and what it means for the countries involved.


Sub-Saharan Africa has been affected the most by HIV/AIDS and I will discuss what has happened in the region and what have been the effects.


I will be looking at how much financial aid is given and what is being done for the countries involved to recover their economies. I will also be looking at what goals have they set.


This chapter will include what is the likelihood for the nations involved to reach their goals. I will also discuss if there will be a total recovery or a recovery at all in the economies. I will also discuss if there is adequate help for these nations and whether there should be more help in fighting poverty that has been affected by HIV/AIDS.








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