PEPFAR Funding Associated with an Increase in Employment Among Males in Ten Sub-Saharan African Countries

Published In: Health Affairs, v. 34, no. 6, June 2015, p. 946-953

Posted on RAND.org on July 07, 2015

by Zachary Wagner, Jeremy Barofsky, Neeraj Sood

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The President's Emergency Plan for AIDS Relief (PEPFAR) has provided billions of US tax dollars to expand HIV treatment, care, and prevention programs in sub-Saharan Africa. This investment has generated significant health gains, but much less is known about PEPFAR's population-level economic effects. We used a difference-in-differences approach to compare employment trends between ten countries that received a large amount of PEPFAR funding (focus countries) and eleven countries that received little or no funding (control countries). We found that PEPFAR was associated with a 13 percent differential increase in employment among males in focus countries, compared to control countries. However, we observed no change in employment among females. In addition, we found that increasing PEPFAR per capita funding by $100 was associated with a 9.1-percentage-point increase in employment among males. This rise in employment generates economic benefits equal to half of PEPFAR's cost. These findings suggest that PEPFAR's economic impact should be taken into account when making aid allocation decisions.

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