AIDS and income distribution in Africa. A micro-simulation study for Cˆote d’Ivoire

We develop a demo-economic micro-simulation model able to simulate over a fifteen years period the impact of AIDS on household and individual incomes. When focusing on the labor supply effects of over- mortality, the main effect of AIDS in Cˆote d’Ivoire is a shrinking of the size of the economy by around 6% after 15 years, leaving average income per capita, income inequality, and poverty roughly unchanged. The dependency ratio is not much modified by the epidemic. These conclusions do not seem to depend on the degree of heterogeneity and clustering of the HIV/AIDS-infections over the population.