The Economics Of Aids

By any measure, the AIDS epidemic is wreaking terrible havoc on a global scale. Current estimates project that, by 2000, some 30 million to 40 million people throughout the world will be infected with HIV, the virus that causes AIDS.

But the personal and social tragedy aside, AIDS may have less of an economic impact than feared, according to a new report by David E. Bloom and Ajay S. Mahal of the National Bureau of Economic Research. Development experts originally worried that the AIDS epidemic would reduce economic growth in such hard-hit African nations as Tanzania and Malawi. AIDS was thought to be more common among highly skilled urban workers, the backbone of any economic development effort. And high medical costs for AIDS patients were going to drain needed funds away from economic investment.

In comparing countries with high and low levels of AIDS, however, Bloom and Mahal find no evidence that per capita income grew more slowly in the former group. One reason: Many developing countries have enough surplus labor to make up for the AIDS-related losses. Moreover, more highly educated workers seem to be taking measures to protect themselves.

Despite these results, Bloom and Mahal observe that the AIDS epidemic may do serious economic damage to particularly hard-hit geographic and demographic groups. In any case, the human toll of AIDS cannot be assessed in mere economic terms.