Key Points:

  • In the 1990s, the AIDS epidemic began to have a devastating impact on South Africa human capital levels.
  • AIDS mortality has the potential to accelerate South Africa’s demographic transition by reducing overall population growth. Annual population growth dropped from 2.85% in the 1960s to 1.46% in the 1990s, while it is projected to be 0.46% in the 2000s.
  • AIDS is reducing human capital in two important ways: The personal and economic returns from years of investment in schooling and higher education are cut off before any returns have accrued to the individuals, family or society, and mortality among parents weakens families, a critical resource for acquisition of human capital by children.
  • Given the challenges created by AIDS, all opportunities to build up higher levels of human capital in children and young people need to be taken, in their own interests and the interests of national economic growth.