The Push to Vaccinate: Reviewing Potential Policy Choices to Incentivize Vaccinations

Raj Ashar | February 2021

Vice President Kamala Harris receiving the second dose of the COVID-19 vaccine on January 26th, 2021

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ith much fanfare, in December 2020 both Pfizer and Moderna released their vaccines to the public, touted with high efficacy in fighting COVID-19. Now, almost two months later, the U.S. is seemingly in the same spot, the depths of the pandemic. This is due to a variety of factors, one of which being the issue of getting vaccines into arms. As of January 28th, 1.3% of the U.S. population had received doses. The more concerning metric is that this is not due to a lack of production; only 54% of the current supply had been used. While this is largely due to a lack of coordination, some of the blame can be attributed to the general public, where there exists a lukewarm (at best) receptivity to receiving the vaccine. 

The two COVID-19 vaccines currently circulating both were produced and granted Emergency Use Authorization (EUA) in less than a year, a record achievement. Yet according to the Pew Research Center, “21% of U.S. adults do not intend to get vaccinated and are ‘pretty certain’ more information will not change their mind.” Additionally, only 55% of those under the age of 30 said they will “definitely” or “probably” get vaccinated. This is as about 70-90% need to be vaccinated for the U.S. to receive herd immunity, the end goal in this process. Therefore, there may need to be measures in place to incentivize people to be vaccinated, and vaccinated as soon as they can.

Before looking at the potential incentives that could be offered, it's important to look at the decision calculation of the average U.S. citizen when deciding whether to take the vaccine. The clear benefit of the vaccine is personal safety; the vaccines are extremely efficacious in preventing death or severe illness. However, as seen with the Pew study the impact of this benefit ranges for various groups; fewer young people are willing to take it due to their lower risk of death or severe illness even without the vaccine. Furthermore, receiving the vaccine does not offer individuals a “return to normal”. Whether one has the vaccine or not, one is expected to wear a mask and socially distance.

 

Turning to the costs, the primary two are time and side effects. To get the vaccine, people will have to carve out time from their day, and in some cases have to wait in large lines. Additionally, both the Pfizer and Moderna vaccines consist of two shots, doubling the time cost to the individual. The second risk is in the side effects. These vaccines were pushed to market in record time, and there has not been enough time to study the long term effects of these vaccines on people, a situation which might increase the perceived risk associated with the vaccine. Another drawback is the vaccine’s immediate side effects. The CDC notes that such side effects can include headache and chills,. So by signing up for the vaccine, one would essentially be signing up for pain and discomfort, at least in the short run. 

Potential Incentives to Encourage Demand for Vaccinations

The two incentives I will focus on are employer-based and individual-based. Some employers have already started to offer a few days off for employees right after they receive the vaccine. This has the effect of reducing the “side-effect cost” of the vaccine since individuals will be able to rest while experiencing the mild side effects. Additionally, it adds the additional benefit of days off from work. Some potential policy avenues with this include, but are not limited to: government employees receiving optional days off post-vaccine, as well as federal or state tax credits for businesses that offer this tentative leave policy in order to offset their potential drop in productivity. 

The second incentive level that could be focused on is the oriented around the individual. One option is to offer either a tax credit or direct payments to individuals who receive the vaccine. Numerous high profile figures have advocated for this, and Robert Litan of the Brookings Institution released a proposal for $200 paid per person upon vaccination and $800 when herd immunity is achieved. These payments would not directly negate any of the costs associated with the vaccine, but possibly change the decisions of those on the margins. However, there are drawbacks to this. On the financial side, $1,000 per person is costly, especially when compounded with the multiple COVID relief packages. Additionally, Dr. Emily Largent and Dr. Franklin Miller outlined some concerns with these proposals, the most notable being that paying people to be vaccinated could signal the danger of the vaccine, leading to increased apprehension among individuals. Furthermore, it could be seen as coercive and “dangling money” in front of Americans in a time when many are in great economic need. 

We are in the depths of a crisis, and the vaccines seem to be our ticket out. Based on our current rate of vaccinations, it will be a while until we are out of the woods. Offering incentives for the vaccine could speed this process. Based on the proposal floated,  employer-based  policies seem more feasible and less costly, but individual payments or tax credits could have a larger effect.

Raj Ashar is the Policy Editor at Midwestern Citizen and is a junior at the University of Michigan studying Economics. In the future he hopes to attend law school and combine his interest in economics with the law. Outside of MC, Raj enjoys watching movies and running.