Left behind: intergenerational transmission of human capital in the midst of HIV/AIDS

This paper provides evidence on how adverse health conditions affect the transfer of human capital from one generation to the next. We explore the differential exposure to HIV/AIDS epidemic in sub-Saharan Africa as a substantial health shock to both household and community environment. We utilize the recent rounds of the Demographic and Health Surveys for 11 countries in sub-Saharan Africa. First, we find that an additional year of maternal education leads to a 0.37-year increase in children’s years of schooling in the developing economies in sub-Saharan Africa. Second, our results show that mother’s HIV status has substantial detrimental effects on inheritability of human capital. We find that the association between infected mothers’ and their children’s human capital is 30 % less than the general population. Finally, focusing only on noninfected mothers and their children, we show that HIV prevalence in the community also impairs the intergenerational human capital transfers even if mother is HIV negative. The findings of this paper are particularly distressing for these already poor, HIV-torn countries as in the future they will have even lower overall level of human capital due to the epidemic.