Does a coronavirus vaccine need the government to push people to take it?

One recent alarm raised by the public health community is that too many people may opt against receiving a COVID-19 vaccine if one becomes available, which advocates claim will exacerbate the harm of the pandemic. There is a call for government intervention to raise vaccine takeup, but this is partly paternalistic and ignores that the harms imposed by the unvaccinated are mostly self-imposed and economic in nature.

Partly due to the Trump administration’s Operation Warp Speed, the development and supply of a COVID-19 vaccine are taking place at record speed while still maintaining required safety scrutiny. The value of this type of vaccine public-private partnership was discussed in a 2019 Council of Economic Advisers report, and the $10 billion spent on Operation Warp Speed is estimated to have an unprecedented return of about 2,800% if it speeds up the introduction of a successful vaccine by six months to January 2021.

With a vaccine supply potentially emerging, the demand for it will likely be less than universal. A recent survey by Science magazine found that only half of the public plans to take the vaccine, and other estimates place this share between one-quarter and one-third.

What should be done, if anything, about a lack of vaccine takeup?

Economists argue that vaccines involve “positive externalities,” as they benefit others in addition to the person vaccinated and should therefore be subsidized. Consistent with this view, some Operation Warp Speed contracts require free vaccines, and public insurance programs may eliminate copays. As many seem unwilling to take a free COVID-19 vaccine, the policy question is therefore whether the price of being unvaccinated should be raised by the government through various means — perhaps by cutting eligibility for public education or insurance programs.

A common view is that vast health harms will be imposed by those who do not get vaccinated. However, once a person takes an effective vaccine, their health will not improve much from others being vaccinated. The same is true for those, like me, who survived COVID-19 if it entails immunity though infection rather than vaccination. If the harm unvaccinated people cause to others is larger than the cost of the vaccine (likely free), they can vaccinate away that harm. However, the “full cost” of the vaccine is not only its monetary cost, or we would have universal adoption of a free COVID-19 vaccine (which we won’t).

A concern with others taking or not taking a COVID-19 vaccine is justified if the vaccine is not effective, in which case a vaccinated individual may get infected. Otherwise, this concern is rather paternalistic. Some, and certainly the anti-vaxxers, believe that the side effects of a vaccine dominate the benefits of reduced infection risk. Being against vaccination for this reason is not an inherent personality trait but rather is governed by incentives.

Parents may view the side effects of a polio vaccine to dominate when there is no polio around, but not when it's raging, as it did in the past. Generally, the incentive to vaccinate rises with disease risk, determined both by the prevalence of the virus and its severity once infected. The fact that disease risk falls with the vaccination rate of others is one reason vaccine-preventable diseases often go in cycles, with vaccination rates shooting up with outbreaks and falling when disease spread is limited. We have seen such a cycle for COVID-19 nationally when people slack off from various forms of prevention whenever disease risk seems to be falling.

Given that disease risk drives vaccination takeup incentives, we will likely see higher COVID-19 vaccination rates among high-risk elderly people relative to the low-risk young, just as we have seen for other preventive COVID-19 behavior. Indeed, once members of high-risk groups are vaccinated, COVID-19’s case fatality rate is comparable to the seasonal flu for the rest of the population, and CDC data suggest only about half of adults take seasonal flu vaccines.

The economic harm of low vaccine takeup will be different from the health impacts it imposes. Even though the health of those taking an effective COVID-19 vaccine is less dependent on the vaccination rate of others, their economic well-being is not. This is because the unvaccinated will continue engaging in reduced economic activity and not resume risky group-based consumption or production at pre-coronavirus levels. This is important because the vast majority of our economic activity and production is by the low-risk young population, for which the incentives to vaccinate are the weakest. Only about 16% of the population is above 65 years old, a major COVID-19 risk factor, and the vast majority of this group is retired and thus has already exited the supply side of the economy.

The incentives for the unvaccinated to participate in the economy will rise due to the lower infection risk induced by others getting vaccinated. Not only will the vaccinated return close to full economic activity, but the unvaccinated will resume economic activity to a larger degree than they did before the vaccine given the lower prevalence of the virus. The unvaccinated benefit from others getting vaccinated both in terms of their health, as infection risk falls, and their economic well-being, as demand for their labor rises when the vaccinated come back into the economy.

In summary, low takeup of an effective vaccine may be due to economic incentives and may have more limited health effects than economic effects on those vaccinated. That economic harm will be difficult to measure, and it is unclear whether policy should punish individuals for not participating in the economy for this reason when we do not go after people for other reasons of being economically passive.

Tomas Philipson served as Member on the Council of Economic Advisers at the White House from 2017-20 and was its acting chairman 2019-2020.