When a significant proportion of a population dies in some disastrous events–such as the ongoing AIDS epidemic–the economic effects depend greatly on which age groups are most affected.
AIDS deaths constitute an economic as well as a human tragedy because they involve people in whom society already has invested resources but who are only beginning to produce for society.
History records numerous periods in which high mortality significantly affected economies. The apocalyptic trio of famine, disease and war usually was a fault. The effect on output and consumption of goods and services varied, however.
The 14th century encompassed two of the worst such events in recorded history. The great European famine of 1315-1317, which was caused by excessive rain and coolness, reduced populations by nearly 15 percent.
Deaths affected different age groups unevenly, however. Large numbers of elderly died, many deliberately starving themselves to save food for their offspring. People of working age were least affected.
This was not true 215 years later for the Black Death, which killed a third of the population in many countries. Working age people were, if anything, more likely to die than the very young or old. The economic and social effects were profound, and output fell sharply. And, conflict arose as ruling elites tried in vain to prevent wages from rising because of the sharp decrease in the labor force.
World War I killed about one in 30 members of the French and German populations as a whole. The equivalent number for the U.S. population today would be 10 million. More than twice as many suffered wounds, many of which reduced their ability to work in an age when most jobs involved physical exertion. War casualties cut European output well below what it might have been throughout the entire inter-war period.
Millions of women never married because men were unavailable. Many took jobs that used to be the exclusive province of men.
Russia’s violent agony began in 1914 and only ended with the Khrushchev regime in the mid 1950s. Tens of millions died in war, famine and purges. Women and men were victims, but men predominated. Again, millions of women never married.
Laws restricting where people lived kept them on farms, where they largely took care of livestock. When this group died off, Soviet livestock production hit a crisis.
While some countries have HIV rates near 40 percent, child mortality from malnutrition and water-borne disease still causes more deaths than AIDS for most of Africa. As some food organizations point out, such deaths equal daily crashes of several jumbo jets.
We tend to ignore these deaths because they are accepted as part of the natural order in poor countries. But however tragic for the family involved, the death of an infant from hunger or diarrhea reduces output of goods and services less than the death of a working-age person because of AIDS.
© 2004 Edward Lotterman
Chanarambie Consulting, Inc.