Impact of AIDS on Family Composition,Welfare, and Investment: Evidence from Uganda*

Although availability of quantitative information on the extent of HIV/AIDS in Africa is improving, the socio‐economic implications of the epidemic remain poorly understood. This paper explores this issue for Uganda focusing on households who received foster children between 1992 and 2000, a phenomenon that affected more than 15% of households. The authors find that addition of a foster child resulted in significant reductions of per capita consumption, income, and household investment which were more pronounced for the poor. Initial disadvantages in foster children's access to education for this group were overcome in the course of UPE implementation, while new inequalities have emerged in access to health services. Foster children's ability to access services will thus be affected by the broader policy environment as well as programs more specifically targeted at this group.