COVID-19 Vaccines: A Shot in Arm for the Economy
IMF Working Papers, December 3, 2021
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- COVID-19 Vaccines: A Shot in Arm for the Economy
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Bibliographic details
- Authors: Niels-Jakob H Hansen, Rui Mano
- Published: December 3, 2021
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781557753540.001
Methodology
- Data: weekly county level data covering the period end-2020 to mid-2021.
- Identification strategy:
- Instrument vaccination rates with county-level pharmacy density interacted with state-level vaccine allocations.
- Include county and state-time fixed effects to control for unobserved factors.
Key findings
- Magnitude of effects:
- An increase of initiated vaccination rates of 1 percentage point increases weekly consumer spending by 0.6 percent.
- An increase of initiated vaccination rates of 1 percentage point reduces weekly initial unemployment claims by 0.004 percentage points of the 2019 labor force.
- Vaccinations increase work-related mobility.
- Overall conclusion:
- Vaccinations are a significant and substantial shot in the arm of the economy.
Heterogeneity of effects
- Effects vary with county characteristics:
- Urban counties exhibit larger effects of vaccinations.
- Counties with initially worse socioeconomic conditions exhibit larger effects of vaccinations.
- Counties with lower education levels exhibit larger effects of vaccinations.
- Equity implication:
- Vaccinations are also a fair shot in the arm for the economy, highlighting that equitable distribution of vaccines is important to reduce inequality.
Scope and external relevance
- Results are specific to the United States.
- Findings hold important lessons for the expected economic impact of vaccinations in other countries.
Source: Niels-Jakob H Hansen and Rui Mano, "COVID-19 Vaccines: A Shot in Arm for the Economy", IMF Working Papers, December 3, 2021.
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