Income Shocks and HIV in Africa

Despite a growing literature documenting strong linkages between income and health, there remains little understanding of how economic factors shape disease outcomes in the HIV/AIDS epidemic. Using individual level data from nineteen sub-Saharan African countries, we show that negative income shocks can lead to substantial increases in HIV prevalence. We match data on individuals’ HIV status from the Demographic and Health Surveys (DHS) to data on local rainfall, a primary and exogenous source of variation in income for rural households in Africa. Infection rates for women (men) in HIV-endemic rural areas increase significantly by 14% (11%) for every drought event experienced in the previous 10 years. These increases appear driven primarily by an outward shift in female supply of transactional sex in response to shocks. JEL Codes: I15, O12, O55