Abstract
In essence, this thesis aims to empirically investigate the direct and indirect effects of health on economic growth in South Africa. In doing so, the study accounts for the influence of social protection over health outcomes and fertility when evaluating the indirect channel through which health affects economic growth. Through these investigations, this thesis aims to achieve four objectives. Firstly, the study examines the direct productivity effects of health by investigating the impact of antiretroviral treatment (ART) on the relationship between HIV/AIDS and economic growth. Secondly, it investigates the effects of ART and child-focused unconditional cash transfers (UCTs) on child mortality as a first step in the examination of the indirect effects of health on economic growth. Thirdly, the study revisits the relationship between child mortality and fertility in South Africa after accounting for the influence of ART and child support grants (CSG). Finally, the study explores potential nonlinearities in the relationship between ART and life expectancy as well as its subsequent effect on economic growth in South Africa. The study is structured into four essays, excluding the introductory and concluding chapters. Each essay stands alone as an independent piece of research.
In the first essay (Chapter 2) the thesis examines the impact of ART on the HIV/AIDS-real GDP per capita relationship in South Africa. The study uses data from nine provinces over the period 1995 to 2019. The study employs both linear and non-linear econometric approaches such as the dynamic common correlated effects mean group instrumental variable (DCCE-MGIV) model and the fixed-effects panel threshold model. This study provides new empirical evidence on the HIV/AIDS-economic growth relationship in a setting characterised by the scale-up of ART. Results show that ART mitigates the negative effects of HIV/AIDS on real GDP per capita by increasing worker productivity. Furthermore, the study finds a U-shaped nonlinear relationship between HIV/AIDS and real GDP per capita that is conditional on the level of ART coverage. The study also finds that the impact of HIV/AIDS on real GDP per capita is higher in men compared to women. These findings suggest that HIV testing and treatment should be expanded to enhance productivity, and men should be prioritised.
The second essay in Chapter 3 provides new empirical evidence on the relationship between ART and child mortality within the socio-economic determinants of child mortality literature. Furthermore, the second essay also provides empirical evidence of the effect of child focused UCTs on child mortality in the African context. This study scrutinises South Africa's provincial level data over the period 2001 to 2019 to evaluate the effect of ART and child-focused UCTs
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on child mortality. The study uses the two-stage instrumental variable mean group (2SIV-MG) estimator. Results show that ART reduces child mortality in South Africa. Moreover, the study finds an inverted U-shaped non-linear relationship between UCTs and child mortality that is contingent on the level of cash transfer coverage. Analyses in this study also reveal that UCTs improve the effect of ART on child mortality by enhancing access and adherence to treatment. While the focus of the study was on the child mortality effects of ART and UCTs, findings from this study also reaffirm the well-documented impacts of factors such as public health expenditure, HIV/AIDS, female education, and health worker density on child mortality. Collectively the combination of high ART and UCTs coverage, increased public health expenditure, enhanced female education, and improved health worker density represent value for money for policymakers and funders. These areas should be prioritised to improve child well-being.
The third essay in Chapter 4 investigates the effect of child mortality, CSG, and ART on fertility in South Africa. The study employs the quality-quantity trade-off framework to analyse the direct and indirect factors affecting fertility, using the two-stage least-squares fixed-effects instrumental variable model. The study uses balanced panel data covering nine provinces from 2001–2016. This period was characterised by significant increases in the CSG and ART coverage. Furthermore, this period was characterised by a significant decline in the under-five mortality rate. The study finds no evidence to support the hypothesis that increases in the CSG coverage are associated with an increase in fertility. This finding aligns with previous literature suggesting that there are no perverse incentives for childbearing associated with the CSG. On the other hand, results indicate that an increase in ART coverage is associated with an increase in fertility. Results also show that a decrease in under-five mortality is associated with a decline in fertility over the sample period. HIV prevalence, education, real GDP per capita, marriage prevalence and contraceptive prevalence are also important determinants of fertility in South Africa. Although the scale-up of ART has improved health outcomes, it also appears to have increased fertility in HIV-positive women. Therefore, the ART programme should be linked to further family planning initiatives to minimise unintended pregnancies.
The fourth essay in Chapter 5 examines the impact of ART on life expectancy and its subsequent effect on real GDP per capita in South Africa, using provincial-level data from 2001 to 2022. Employing non-linear and linear estimation methods such as the fixed-effects panel threshold model and the 2SIV-MG model, the study reveals a U-shaped non-linear relationship between ART and life expectancy. This suggests that HIV/AIDS may well reduce life
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expectancy when ART coverage is at low levels due to delayed treatment. However, higher levels of ART coverage increase life expectancy, highlighting the importance of a timely HIV diagnosis and scale-up of treatment. Furthermore, the study finds a positive association between life expectancy and real GDP per capita, indicating that the improved life expectancy resulting from increased ART rollout contributes to the accumulation of human and physical capital, ultimately outweighing the dilutive effect of population growth. The findings emphasise the economic significance of ART and the need for increased ART coverage, beyond its humanitarian impact, in regions with high HIV/AIDS prevalence.