Health and productivity in the context of HIV/AIDS: the long- run economic impacts on antiretroviral therapy

Using longitudinal survey data collected in Kenya, this paper estimates the longer-term impacts of antiretroviral therapy (ART) on the labor supply of treated adults and their household members. Building upon previous work in Kenya, data collected from 2004-2006 indicate that early evidence on the short-run impacts of ART tends to be upheld over the long-term as well. The results show that the labor supply response among treated adults occurs rapidly and is sustained through the 3-year observation period in our study. Since patient health would continue to decline without treatment, these labor supply responses could be viewed as underestimates of the impact of treatment on the treated. However, there is substantial attrition of adult patients from the study due to the poor initial health status of many patients at the time of treatment initiation. The responses in the labor supply of patients’ household members are heterogeneous. Contrary to the short-run impacts presented earlier, we find that the labor supply of adult household members declines while that of children is unchanged. The primary results for treated adults further underscore the strong relationship between health and labor supply that has been observed in other contexts. * Financial support for this project was received from the Economic and Social Research Council (UK), Pfizer, Inc., The World Bank, Yale University's Center for Interdisciplinary Research on AIDS (CIRA) through a grant from the National Institute of Mental Health to Michael Merson, M.D. (No. P30 MH 62294), and the Social Science Research Council. All errors and opinions are our own. 1 Gillings School of Global Public Health, University of North Carolina at Chapel Hill and The World Bank