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The Vaccine Boost: Quantifying the Impact of the COVID-19 Vaccine Rollout on Measures of Activity

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Abstract

This paper investigates the impact of vaccine administration on three main dimensions of activity: spending, mobility, and employment. Our investigation combines two parts. First, we exploit the variation in vaccine administration across states. In panel regressions that include a large set of controls, we find that the rollout has a significant impact on spending, while the results on mobility and employment are mixed. Second, to address concerns of endogeneity, we look at the impact of vaccine lotteries on spending. Using a dynamic event design setting, we find that lotteries have significantly boosted vaccination rates about a week after announcement, with an effect that lasts over the next several days and increases new vaccinations between 3.5 and 5 percent. This boost in vaccination rates, in turn, translates into a significant increase in retail spending, which is larger and somewhat more persistent than what we document in our state-level panel regressions. All told, our findings imply that the vaccine rollout added, on average, 0.5 percentage point to GDP growth in 2021.

Suggested Citation

  • Ashley Sexton & Maria D. Tito, 2022. "The Vaccine Boost: Quantifying the Impact of the COVID-19 Vaccine Rollout on Measures of Activity," Finance and Economics Discussion Series 2022-035, Board of Governors of the Federal Reserve System (U.S.).
    • Handle: RePEc:fip:fedgfe:2022-35
    DOI: 10.17016/FEDS.2022.035
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    1. Aditya Aladangady & Shifrah Aron-Dine & Wendy Dunn & Laura Feiveson & Paul Lengermann & Claudia Sahm, 2021. "From Transaction Data to Economic Statistics: Constructing Real-Time, High-Frequency, Geographic Measures of Consumer Spending," NBER Chapters, in: Big Data for Twenty-First-Century Economic Statistics, pages 115-145, National Bureau of Economic Research, Inc.
    2. Tom Chang & Mireille Jacobson & Manisha Shah & Rajiv Pramanik & Samir B. Shah, 2021. "Financial Incentives and Other Nudges Do Not Increase COVID-19 Vaccinations among the Vaccine Hesitant," NBER Working Papers 29403, National Bureau of Economic Research, Inc.
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    More about this item

    Keywords

    COVID-19 vaccine rollout; Economic activity;

    JEL classification:

    • I00 - Health, Education, and Welfare - - General - - - General
    • H80 - Public Economics - - Miscellaneous Issues - - - General

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