Objective: To examine whether the loss of disability grants creates perverse incentives to forego treatment and negatively impacts health and economic welfare among individuals on highly active antiretroviral therapy (HAART) in South Africa.
Design: Three-year panel study of a sample of individuals in Khayelitsha (a large poor, black township in Cape Town, South Africa) on HAART.
Methods: Descriptive cross-tabulations and multivariate individual fixed effects regressions using self-reported health status, adherence to treatment, individual and household incomes and employment status as dependent variables and a binary indicator of disability grant status as the main independent variable.
Results: We found no statistically significant association between grant receipt and adherence to treatment, self-reported health status, or side effects from HAART. None of the individuals in the sample reported that they would be willing to forego treatment to remain eligible for grants and all respondents reported perfect or near perfect adherence to treatment. However, a loss of a disability grant was associated with substantial decreases ion individual and household incomes, respectively.
Conclusion: While we found no evidence of people trading off their health for income, there still appears to be a large financial burden associated with disability grant loss, which could increase the salience of perverse incentives, especially among those who are unable to find employment. Future research should examine alternative social welfare programs for AIDS-sick individuals that minimize incentives to trade-off health for economic security.
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