The Indirect Impact of Antiretroviral Therapy

Working paper number: 
12-08
Paper Abstract: 
In response to AIDS mortality in Sub-Saharan Africa, international donors have collaborated with many national governments to provide free antiretroviral therapy (ART) to people with HIV. We explore the impact of this decline in objective mortality risk on subjective perceptions of mortality risk, as well as mental health, and agricultural labor supply and output. Through a difference-indifference identification strategy, we find that ART availability substantially reduces subjective mortality risk and improves mental health in rural Malawi, including among HIV-negative respondents. People allocate significantly more time to subsistence maize cultivation and increase maize output. These results show a novel link between mortality conditions and economic development through the channel of mental health. Findings for the HIV-negative subpopulation also demonstrate that the impact of the AIDS epidemic and ART are broader than previously understood.