The indirect impact of antiretroviral therapy: Mortality risk, mental health, and HIV-negative labor supply

Abstract

To reduce the burden of the HIV/AIDS epidemic, international donors recently began providing free antiretroviral therapy (ART) in parts of Sub-Saharan Africa. ART dramatically prolongs life and reduces infectiousness for people with HIV. This paper shows that ART availability increases work time for HIV-negative people without caretaker obligations, who do not directly benefit from the medicine. A difference-in-difference design compares people living near and far from ART, before and after treatment becomes available. Next we explore the possible reasons for this pattern. Although we cannot pinpoint the mechanism, we find that ART availability substantially reduces subjective mortality risk and improves mental health. These results show an undocumented economic consequence of the HIV/AIDS epidemic and an important externality of medical innovation. They also provide the first evidence of a link between the disease environment and mental health.

The Impact of AIDS Treatment on Savings and Human Capital Investment in Malawi

“…Baranov, Bennett, and Kohler (2015) show that ART availability reduces subjective mortality risk and its components: infection risk and mortality risk conditional on HIV infection, and that these effects are robust to spatial and demographic controls and for the subsample of HIV-negative non-caretakers. 56 Respondents answer questions about their own mortality risk as well as mortality risk for hypothetical individuals similar to them that are healthy, HIV+, or on ART, each over three time-horizons (one, five, and ten years).…”

“…Importantly, Baranov, Bennett, and Kohler (2015) also find improvements in mental health associated with reduction in worry about AIDS mortality, suggesting that the increased labor supply may be driven by improvements in mental health. While the patterns of expenditures do not support that our findings are driven entirely by mental health improvements (as that would be akin to a productivity or income shock), it is possible that large reductions in mortality risk increase investment through the horizon effect but also reduce anxiety and stress, improving mental health, which translates to increased productivity or work effort.…”

“…Our results indicate there is evidence that non-child expenditures are decreasing. Additionally, Baranov, Bennett, and Kohler (2015) show that households near ART availability increase the time spent working on the farm. More time on the farm would imply that households need to purchase less food, though food expenditures Notes: Standard errors (in parentheses) are clustered by village (113 clusters) and robust to heteroskedasticity.…”

“…Using the same data and identification strategy as this paper, Baranov, Bennett, and Kohler (2015) show that HIV-negative respondents near ART reported to be less worried about AIDS. Furthermore, respondents reported lower mortality risk for people living with HIV, after ART became available nearby, while perceived HIV prevalence was unaffected.…”

“…Furthermore, we do not observe increases in spending on other consumption goods such as clothing or short-term investments, such as seed, fertilizer, or other agricultural inputs. However, ART availability may improve mental health and productivity (Baranov, Bennett, and Kohler 2015); we cannot rule out that some of the investment response may be due, in part, to improvements in mental health or unobserved earnings associated with a reduction in AIDS-related stress.…”