Essays on Economic Behaviour: HIV/AIDS, Schooling, and Inequality

Abstract: Paper 1: Economic Inequality and HIV in Malawi To analyze if the spread of HIV is related to economic inequality we estimate multilevel models of the individual probability of HIV infection among young Malawian women. We find a positive association between HIV infection and inequality at both the neighbourhood and district levels, but no effect of individual poverty. We also find that the HIV-inequality relationship is related to risky sex, gender violence, and return migration, though no variable completely replaces economic inequality as a predictor of HIV infections. The HIV-inequality relationship does not seem to be related to bad health, gender gaps in education or women’s market work. Paper 2: Uncovering the Impact of the HIV Epidemic on Fertility in Sub-Saharan Africa: the Case of Malawi We evaluate the impact of the HIV/AIDS epidemic on the reproductive behaviour for all women in Malawi, HIV-negative and HIV-positive alike, allowing for heterogeneous response depending on age and prior number of births. HIV/AIDS increases the probability that a young woman gives birth to her first child, while it decreases the probability to give birth of older women and of women who have already given birth. The resulting change in the distribution of fertility across age groups is likely to be more demographically and economically important than changes in the total number of children a woman gives birth to. Paper 3: HIV/AIDS, Mortality and Fertility: Evidence from Malawi This paper studies the effect of HIV/AIDS on actual and desired fertility in rural Malawi, using the 2004 Demographic and Health Survey. The focus is on HIV-negative women and men, and behavioral responses in the general population. To avoid feedback effects, lagged prime-age mortality is used as a proxy for HIV/AIDS, and to control for time-invariant factors influencing both fertility and prime-age mortality, pre-HIV district fertility is used. We find a positive behavioral fertility response to mortality increases. Moreover, actual fertility responds positively to male mortality but negatively to female mortality, while women’s and men’s desired fertility respond negatively to mortality. These findings are consistent with an insurance and old-age security motive for having children among rural Malawian women. When a woman risks death before her children grow up, the value of children is low, and when the risk of husband’s death is high, the value of children is high. We also find that the positive fertility response is limited to younger women, with no discernable age-pattern in desired fertility effects. Possible reasons are early marriage to reduce risk of HIV-infections and having babies early to reduce the risk of giving birth to HIV-infected babies. Paper 4: Does a Diversification Motive Influence Children’s School Entry in the Ethiopian Highlands? Household-level diversification of human capital investments is investigated. A simple model is developed, followed by an empirical analysis using 2000-2007 data from the rural Amhara region of Ethiopia. Diversification would imply negative siblings’ dependency and be more important in more risk-averse households. Hence it is investigated if older siblings’ literacy has a more negative (smaller if positive) impact on younger siblings’ school entry in more risk-averse households. Results suggest diversification across brothers, but are not statistically strong, and with forces creating positive sibling dependency dominating over diversification. Paper 5: The Effect of Older Siblings’ Literacy on School-Entry and Primary School Progress in the Ethiopian Highlands The effects of older sisters’ and brothers’ literacy on the annual school entry and primary school grade progress probabilities of boys and girls are estimated using within-household variation. Older siblings’ literacy has positive effects, especially for same-sex siblings. The literacy of older sisters appears to be more beneficial than that of older brothers, not least since it has positive effects on school entry among both boys and girls, and since it has positive effects also when the sister has left the household. There are positive effects both from literate older siblings who left school and from literate older siblings who are still in school. This suggests that within-household education spillovers, rather than time-varying credit constraints, explain the positive sibling-dependency, since with credit constraints children in school would compete over scarce resources. The positive effects on school progress are limited to same-sex siblings who are still present in the household, suggesting every-day interactions to be important. Paper 6: Preferences for Redistribution—A country Comparison of Fairness Judgements This paper seeks to explain within- and between-country variation in redistributive preferences in terms of self-interest concerns and an input-based concept of fairness, which we examine by looking at the effects of beliefs regarding the causes of income differences. Results of estimations based on data for 25 countries indicate that both factors are indeed important determinants of redistribution support, in line with hypothesised patterns. We find that while differences in beliefs on what causes income differences seem to be important for explaining within-country variation in redistributive preferences, they do little to explain between-country differences. Differences in the effects of holding certain beliefs, however, are important for explaining between-country variation in redistributive preferences, suggesting considerable heterogeneity across societies in what is considered as fair.