The Effect of Access to AIDS Treatment on Employment Outcomes in South Africa

Abstract

Antiretroviral (ARV) drug treatment for AIDS dramatically improves health status and increases life expectancy, but there is little evidence on whether it improves employment outcomes in developing countries. In this paper, I examine the labor market effects of the government provision of free ARV treatment in public health clinics in South Africa, which enrolled over 500,000 patients between 2004 and 2008. I use geographic and temporal variation in the program rollout to identify the causal impact of ARV treatment on labor force participation and employment. This study is the first evaluation of the largest AIDS treatment program in the world. When a clinic opens nearby, labor force participation and employment rise for Black men but there are no discernible effects for women. An increase in the fraction of the population of a neighborhood receiving treatment decreases participation and raises employment for both men and women. These results suggest that AIDS treatment is under-supplied in South Africa if these positive labor market effects are not taken into account.