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This paper studies the effect of the HIV and AIDS epidemic on economic decision making using the Uganda National Household Survey (2010). The findings indicate that household’s HIV and AIDS status, education and social-economic factors are important in explaining low household’s asset accumulation and school enrolments of children in Uganda especially at primary school level. Household savings and assets accumulation findings show that household’s HIV and AIDS status and their education levels, marital status and the employment status are consistently associated with lower savings. Major implications of these results is that raising women’s education improves their economic opportunities and the behavioral responses in sexual interaction will lead to decline in HIV infection by reducing the willingness to engage in unprotected sex. In fact, we find that educational performance declines in those HIV infected households in which the father is living with HIV. The paper recognizes the policy challenges surrounding the HIV and AIDS -education linkage and considers some of the strategies that have been implemented to improve the schooling outcomes of children from households of people living with HIV (PLHIV). We find a weak positive effect of HIV infection on savings and a significant positive effect on school enrolment and educational expenses for children. High-perceived infection risk has a positive albeit imprecise influence on school enrollment and educational expenses, but no effect on savings.

Consequences of HIV Infection on Household Assets and Human Capital Investment in Uganda: Micro Evidence