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Consumption and tax gains attributable to Covid-19 vaccinations in 12 EU countries with low vaccination rates

Cylus, Jonathan ORCID: 0000-0001-8269-1578, Walters, Jessica, McKee, Martin and Cowley, Peter (2023) Consumption and tax gains attributable to Covid-19 vaccinations in 12 EU countries with low vaccination rates. European journal of public health, 33 (2). 228 - 234. ISSN 1464-360X

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Identification Number: 10.1093/eurpub/ckad023

Abstract

BACKGROUND: The Covid-19 pandemic is an economic and a health crisis. Households reduced consumption expenditures as large-scale physical distancing measures, lower disposable incomes and fear of infection when engaging in many types of economic activity took hold. This, in turn, reduced domestic tax revenues at a time when governments were facing increased financial pressures to strengthen and sustain welfare states. METHODS: We developed a simulation model, the Covid-19 Taxination Simulator, to estimate potential economic gains and tax revenues attributable to vaccine rollouts. We apply the model to 12 European Union countries which had low vaccination rates at the beginning of 2022. RESULTS: The highest growth in aggregate personal consumption expenditure attributable to Covid-19 vaccines administered as of January 2022 is in Greece (10.8%), Slovenia (8.6%) and Czechia (8.6%), while the lowest is in Bulgaria (2.2%) and Slovakia (2.1%). If countries had vaccinated 85% of their adult population, the largest gains in consumption tax revenues would be expected in Romania (830 million Euros) and Poland (738 million Euros). Consumption tax revenues generated by meeting the 85% of the adult population target would, on their own, be large enough to fully cover the costs of expanding the vaccine rollout itself in Estonia, Latvia, Slovenia, Croatia, Czechia, Hungary and Greece. CONCLUSION: Covid-19 vaccination rollouts not only save lives and relieve pressures on health systems, they also support economic growth and generate additional tax revenues. These revenues can partially offset the costs of vaccines programmes themselves.

Item Type: Article
Official URL: https://academic.oup.com/eurpub
Additional Information: © 2023 The Authors
Divisions: European Observatory on Health Systems
LSE Health
Subjects: R Medicine > RA Public aspects of medicine > RA0421 Public health. Hygiene. Preventive Medicine
H Social Sciences > HV Social pathology. Social and public welfare. Criminology
H Social Sciences > HJ Public Finance
JEL classification: D - Microeconomics > D1 - Household Behavior and Family Economics > D10 - General
I - Health, Education, and Welfare > I1 - Health > I18 - Government Policy; Regulation; Public Health
Date Deposited: 18 Apr 2023 14:03
Last Modified: 27 Feb 2024 22:15
URI: http://eprints.lse.ac.uk/id/eprint/118659

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