Vietnam - Netherlands Programme

Abstract:
We build a micro-simulation model able to simulate over a 15 years' period the impact of AIDS on the distribution of income in Côte d'Ivoire. We focus on the labour supply effects of AIDS-induced mortality. We find that although the size of the economy in terms of total household income is reduced by about 6% after 15 years, average household income per capita, household income inequality and poverty remain almost unchanged. However, on the household level, AIDS mortality clearly has a negative impact, but this effect has only weak distributional consequences, given the distribution of AIDS mortality over the population. In contrast to an often heard argument, the average population dependency ratio is in our case not much modified by the AIDS epidemic.

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