Working Paper

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

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;

JEL Classification: I00; H80;

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Bibliographic Information

Provider: Board of Governors of the Federal Reserve System (U.S.)

Part of Series: Finance and Economics Discussion Series

Publication Date: 2022-06-02

Number: 2022-035