AIDS Growth and Distribution in South Africa

This paper discusses recent research into the economic impact of AIDS in South Africa. It focuses on demographic and macroeconomic modelling and on firm-level impact studies. While the overall picture is murky, certain trends and findings are indicative of a likely increase in inequality. Relatively skilled workers could benefit from greater employment, higher wages, a larger supply of products produced for their niche markets, and may also live longer as it becomes economically viable for firms to provide anti-retroviral medication. The relatively unskilled and unemployed will probably experience declining income, falling consumer welfare, and suffer greater morbidity and mortality from AIDS. The size of the pie may shrink as a result of AIDS, but employed people – and especially the skilled amongst them – will enjoy a growing.