HIV Treatment as Economic Stimulus: Community Spillover Effects of Mass ART Provision in Rural South Africa

Jacob Bor, Boston University
Zoe McLaren, University of Michigan
Frank Tanser, Africa Centre for Health and Population Studies
Till Barnighausen, Harvard University

Antiretroviral therapy (ART) enables HIV patients to remain in, or return to, the labor force. However, the spillover effects of mass ART provision on labor market outcomes of HIV-uninfected community members have not been measured. Economic theory predicts that rising labor supply among HIV-positives should reduce wages and employment levels among HIV-negatives. We assess the effect of local area ART coverage on labor market outcomes- separately for HIV-infected and HIV-uninfected adults- using longitudinal data on 21,868 individuals from a health and demographic surveillance system in rural South Africa (2001-2011). To obtain causal effects, we exploit differential rollout of ART by distance to clinic. ART scale-up led to large, statistically-significant gains in employment. Contrary to our theoretical prediction, these gains were experienced by HIV-infected and HIV-uninfected community members alike. Ruling out household spillover effects as the explanation, our data suggest that ART scale-up led to a large increase in labor demand.

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Presented in Session 220: Labor Markets and Human Capital in Developing Countries