Should The Government Pay People To Get Vaccinated? Some Economists Think So

Beating back the pandemic may come down to simple math: getting enough people vaccinated.

Dr. Anthony Fauci, the nation's top infectious disease expert, says the country will likely need a vaccination level of between 70% and 90% to reach herd immunity.

Right now, that math doesn't quite add up. That's because more than 30% of people say they either won't, or probably won't, get the vaccine. Skeptics run the gamut — from dedicated anti-vaxxers to people with religious objections to some health care workers who have balked at getting shots.

With such wariness about COVID-19 vaccines, should the government then pay people to get vaccinated? The idea of a cash-for-shots program is being promoted by some economists and politicians in case the country struggles to get to herd immunity this year.

Overcoming vaccine skepticism may take more than public service appeals from celebrities, politicians and scientists, says Robert Litan, an economist affiliated with the Brookings Institution. So he has been advocating a Plan B — cash payouts for everyone who gets vaccinated.

Here's how his idea works: Everyone who gets vaccinated would be eligible for a $1,000 payment from the federal government. You'd get $200 for taking both vaccine shots. And then an additional $800 once the country reaches herd immunity.

The idea came to Litan and his wife when they were brainstorming about how they'd ever be able to get out of their house in Lawrence, Kansas. Both of them are 70 years old.

The idea is textbook economics. People respond to incentives. And incentives can be used not just for the sake of individuals, but for the benefit of society as a whole. Like insurance discounts for safe driving. Or cash payouts for employees who quit smoking. And they have been tried with vaccinations — for example in rural India where childhood immunization rates were low and even a relatively small incentive — a sack of lentils and metal plates — raised them significantly.

After Litan wrote about paying Americans to get vaccinated, the idea got backing from former Democratic presidential candidates - John Delaney and Andrew Yang. And the prominent economist Greg Mankiw. But that's about it. There's no groundswell. No bill in Congress.

"It may not be ready for prime time until we actually see the take up rate" for vaccinations, says Litan. If the rate is relatively low and suspicion about the vaccines endures, that would bolster the case for payouts, he says.

His plan would cost the country between $250 billion and $300 billion. But Litan says it would be a drop in the bucket compared to the economic harm if the pandemic persists. He views it as the price for having a divided country where so many people don't trust the government and vaccines.

But some say the idea might backfire.

"Payments may indeed encourage some people to get the vaccine," says Cynthia Cryder, an associate professor of marketing at Washington University's Olin Business School. "But it may also deter people from getting the vaccine. Because payments signal that the vaccine is risky."

She adds that a cash-for-shots program could set a bad precedent, creating more skepticism about other vaccines.

Another method of getting to herd immunity may exist, though it has not been discussed widely. Mandates — requiring people to get vaccinated either by orders of state governments or employers.

Legal precedent establishing the rights of states to mandate vaccination has been in place since 1905. In a case involving smallpox vaccinations, the Supreme Court ruled that states had the authority to mandate vaccinations under their police powers to protect public health and safety.

In practice, this authority is used when it comes to children and the proof of vaccination required to attend school. Also, many employers appear to be on solid ground to require their workers to take the COVID-19 vaccine, with some exceptions, according to legal experts.

To economist Robert Litan, if we ultimately must choose between the carrot of cash payouts and the stick of mandated vaccines, the answer is clear: the carrot.

"I think the level of anger in the country will go up extraordinarily high if we had mandates," he says.

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