Working Paper: CEPR ID: DP5714
Authors: Clive Bell; Hans Gersbach
Abstract: What is the right balance among policy interventions in order to ensure economic growth over the long run when an epidemic causes heavy mortality among young adults? We argue that, in general, policies to combat the disease and promote education must be concentrated, in certain ways, on some subgroups of society, at first to the partial exclusion of others. This concentration involves what we term the macroeconomics of targeting. The central comparison is then between programs under which supported families enjoy the benefits of spending on health and education simultaneously (DT), and those under which the benefits in these two domains are sequenced (ST). When levels of human capital are uniformly low at the outbreak, DT is superior to ST if the subsequent mortality rate exceeds some threshold value. Outside aid makes DT more attractive; but DT restricts support to fewer families initially and so increases inequality.
Keywords: education; support; epidemic diseases; health policies; HIV/AIDS; macroeconomics of targeting; poverty traps; single and double targeting
JEL Codes: E62; H20; I10; I20; O11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| double-domain targeting (Y80) | human capital accumulation (J24) |
| double-domain targeting (Y80) | per capita income growth (O49) |
| higher mortality rate (I12) | effectiveness of educational and health interventions (I24) |
| outside aid (F35) | attractiveness of double-domain targeting (Y80) |
| double-domain targeting (Y80) | superior outcomes compared to single-domain targeting (Y80) |