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Direct and Indirect Effects of Vaccines: Evidence from COVID-19

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  • Seth Freedman
  • Daniel W. Sacks
  • Kosali Simon
  • Coady Wing

Abstract

We estimate direct and indirect vaccine effectiveness and assess how far the infection-reducing externality extends from the vaccinated, a key input to policy decisions. Our empirical strategy uses nearly universal microdata from a single state and relies on the six-month delay between 12- and 11-year-old COVID vaccine eligibility. Vaccination reduces cases by 80 percent, the direct effect. This protection spills over to close contacts, producing a household-level indirect effect about three-fourths as large as the direct effect. However, indirect effects do not extend to schoolmates. Our results highlight vaccine reach as important to consider when designing policy for infectious disease.

Suggested Citation

  • Seth Freedman & Daniel W. Sacks & Kosali Simon & Coady Wing, 2026. "Direct and Indirect Effects of Vaccines: Evidence from COVID-19," American Economic Journal: Applied Economics, American Economic Association, vol. 18(1), pages 1-43, January.
    • Handle: RePEc:aea:aejapp:v:18:y:2026:i:1:p:1-43
    DOI: 10.1257/app.20230717
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    More about this item

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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