90 CHAPTER 5


On a shorter time horizon, the transition affects the unemployment rate among the young if, as a consequence of their exit from the school system, they are insufficiently educated. Another effect is on adult household mem- bers, who survive the crisis and accommodate the mortality shocks by chang- ing their time allocation. For example, household members may need to look for earning opportunities in the labor market or may move to household work to care for the ill.2 In the analysis that follows, I investigate these issues in detail, acknowledging the possibility that the behavioral response to adult mortality may differ by gender.


A number of recent studies attempt to identify the impacts of prime-age adult mortality on child schooling and labor supply (for example, Ainsworth, Beegle, and Koda 2005; Yamano and Jayne 2005). Though I subsequently detail the main relevant findings of these studies, and note that they vary greatly in their methodologies, the point is that they demonstrate the impor- tance of prime-age adult deaths in determining child school enrollment and attendance. In the literature, however, the impact on labor supply is less visible than that on child schooling (Beegle 2005). Because we identify labor supply effects, our contribution to the literature is important in this regard. Also, whereas most of these studies share motivations similar to ours, they deal with agricultural settings. In contrast, our sample comes from semi- industrialized settings in South Africa, where the dominant income source for households is wage employment (see, for example, Dieden 2004). These dif- ferences provide a set of risk-coping and -mitigating strategies distinct from those in other rural contexts in Sub-Saharan Africa. They also justify our focus on labor supply and schooling decisions.


This chapter is structured as follows. The section “Mortality Change” pro- vides evidence of excess mortality in the province of KwaZulu-Natal. The data used for this chapter come from KIDS rounds 2 and 3, conducted in 1998 and 2004, respectively. “Impact of Prime-Age Adult Mortality on Schooling and Labor Supply” sets the empirical framework for our analysis. The next two sections respectively describe activity transitions in the sample and present our empirical results.


2 Though these phenomena occur at the micro level, it is often argued at the macro level that prime-age adult mortality resulting from HIV/AIDS causes labor shortages. However, with high unemployment rates, as observed in South Africa, labor shortages may not occur if the degree of (skill) substitutability between the dying and the unemployed is high. Even in agricultural household production, where this causality looks rather straightforward, the degree of substitu- tion between household members and hired labor matters. However, if female household mem- bers engage in a shift, there might then be a decrease in their time input to child education in the family. Therefore, changes in labor supply might affect human capital formation over the medium run.


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