June 2022

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

Maria D. Tito and Ashley Sexton

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.

Keywords: COVID-19 Vaccine Rollout, Economic Activity

DOI: https://doi.org/10.17016/FEDS.2022.035

PDF: Full Paper

Disclaimer: The economic research that is linked from this page represents the views of the authors and does not indicate concurrence either by other members of the Board's staff or by the Board of Governors. The economic research and their conclusions are often preliminary and are circulated to stimulate discussion and critical comment. The Board values having a staff that conducts research on a wide range of economic topics and that explores a diverse array of perspectives on those topics. The resulting conversations in academia, the economic policy community, and the broader public are important to sharpening our collective thinking.

Back to Top
Last Update: June 02, 2022