IMPACT OF HIV ON ECONOMIC GROWTH
IMPACT OF HIV/AIDS ON ECONOMIC GROWTH
The impact of HIV/AIDS on economic growth is highly complex but it originates in its impact on the labour force ,interms of both growth and productivity. Increase in the number of infected people will reduce productivity.If sick people ,who are infected are unable to obtain good healthcare ,the burden of disease in countries will increase and impair productivity.
The increased demand for healthcare services both preventive such as blood screening and treatment ,may crowd out other government investments un health and other goverent sectors .The saving rate in the economy may fall both relatively and absolutely.Hiv infected people will face lower incomes and rising health expenditures, increasing consumption expenditures hence rediction in savings. As the epidemic spreads ,if people adopt fatalistic attitudes and perceive shorter lifespans then they may also choose to save less for the future. This hinders sources of investment due to less savings.Lowered rates of productive investment result in slower economic growth in the future.
A shift in the demographic structure that is a change in population structure due to AIDS- a movement toward younger rather than older older populations- will result in shift in relative social service expenditures .If health care expenditures are higher for young than the old, then higher healthcare expenditure will be required regardless of the additional direct health costs of preventing and treating the disease.Similarly ,although the absolute numbers of the younger population may be falling as a result of AIDS , the relative proportion will grow, resulting in higher demand for education expenditures.This produces a shift in the dependency on social sector spending and the tax resources to finance it.
The situation in heavily affected AIDs countries will be similar except that the depe dent population will be the young.Despite the relative increase in demand for government health and education spending by the young , AIDS will lower the social returns to the public investment in both health and education shortening life expectancies and thus the time over which society recoups its initial investment.On a more positive note , providing investment in the young can be at least maintained once the AIDS epidemic is curtailed and the ferltility transition is completed, there will be the equivalent of a population when the number of workers relative to dependents will be high. This could potentially result in rapid economic growth .similarly to its impact in the social returns to human capital investment, AIDS will affect the private rates of return to human capital investment in health and education , particularly with the introduction of health and education user fees adjustment programs.However if parenr believe there children are unlikely to survive long enough to support them in old age,then they may reduce investments in preventive health care such as immunization programs for the children. Parents also face dillemma regarding educational investment if ,if AIDS strikes at the more educated ,productive workers , a skill shortage will be created increasing wages of workers therefore the private return to education
Thus we can say HIV/AIDS puts pressure on both government and households interns of investing in human capital,reduced levels of human capital investment will have negative consequences for future economic growth by virtue of a less educated workforce in pooree overall health.
Jonah mugendi
The impact of HIV/AIDS on economic growth is highly complex but it originates in its impact on the labour force ,interms of both growth and productivity. Increase in the number of infected people will reduce productivity.If sick people ,who are infected are unable to obtain good healthcare ,the burden of disease in countries will increase and impair productivity.
The increased demand for healthcare services both preventive such as blood screening and treatment ,may crowd out other government investments un health and other goverent sectors .The saving rate in the economy may fall both relatively and absolutely.Hiv infected people will face lower incomes and rising health expenditures, increasing consumption expenditures hence rediction in savings. As the epidemic spreads ,if people adopt fatalistic attitudes and perceive shorter lifespans then they may also choose to save less for the future. This hinders sources of investment due to less savings.Lowered rates of productive investment result in slower economic growth in the future.
A shift in the demographic structure that is a change in population structure due to AIDS- a movement toward younger rather than older older populations- will result in shift in relative social service expenditures .If health care expenditures are higher for young than the old, then higher healthcare expenditure will be required regardless of the additional direct health costs of preventing and treating the disease.Similarly ,although the absolute numbers of the younger population may be falling as a result of AIDS , the relative proportion will grow, resulting in higher demand for education expenditures.This produces a shift in the dependency on social sector spending and the tax resources to finance it.
The situation in heavily affected AIDs countries will be similar except that the depe dent population will be the young.Despite the relative increase in demand for government health and education spending by the young , AIDS will lower the social returns to the public investment in both health and education shortening life expectancies and thus the time over which society recoups its initial investment.On a more positive note , providing investment in the young can be at least maintained once the AIDS epidemic is curtailed and the ferltility transition is completed, there will be the equivalent of a population when the number of workers relative to dependents will be high. This could potentially result in rapid economic growth .similarly to its impact in the social returns to human capital investment, AIDS will affect the private rates of return to human capital investment in health and education , particularly with the introduction of health and education user fees adjustment programs.However if parenr believe there children are unlikely to survive long enough to support them in old age,then they may reduce investments in preventive health care such as immunization programs for the children. Parents also face dillemma regarding educational investment if ,if AIDS strikes at the more educated ,productive workers , a skill shortage will be created increasing wages of workers therefore the private return to education
Thus we can say HIV/AIDS puts pressure on both government and households interns of investing in human capital,reduced levels of human capital investment will have negative consequences for future economic growth by virtue of a less educated workforce in pooree overall health.
Jonah mugendi
Comments
Post a Comment