The Impact of AIDS Treatment on Savings and Human Capital Investment in Malawi

Victoria Baranov, University of Chicago
Hans-Peter Kohler, University of Pennsylvania

Antiretroviral therapy (ART), a treatment developed to delay the onset of AIDS, has recently become available at low or no cost throughout many African countries, quickly increasing life expectancy in those countries. Economic theory predicts that a longer life expectancy increases the value of long-term investments, although empirical evidence for this result has been difficult to obtain. This paper uses spatial and temporal variation in ART availability in Malawi to evaluate the impact of ART provision on savings and human capital investment. Using a difference-in-difference approach, we find that ART has a large and significant impact on savings behavior, as well as a large estimated impact on child expenditures, particularly for schooling and medical expenses. Additionally, grade attainment and health improve for the sample of the respondents' children near ART. We show these results for the sub-sample of HIV-negative individuals who do not directly benefit from receiving ART.

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Presented in Session 174: HIV/AIDS in the Era of ART