Allocating vaccines to remote and on-site workers in the tradable sector

Abstract

AbstractVaccination may be the solution to the pandemic-induced health crisis, but the allocation of vaccines is a complex task in which ethical, economic and social considerations are important. The biggest challenge is to use the limited number of vaccines available in a way that protects vulnerable groups, prevents further spread of infection, and reduces economic uncertainty. We argue that once the vaccination of healthcare workers and the most vulnerable groups has been completed, prioritizing the vaccination of on-site workers is important not only to slow the spread of the infection, but also to ensure the smooth running of economic production. We propose a simple economic model where remote and on-site workers are complementary to each other in the short run, thus a negative shock to the supply of either one may decrease the demand for the other, leading to unemployment. By illustrating the model using pre-Covid employment data from Sweden and Hungary, we show that the optimal vaccine allocation between remote and on-site workers in the tradable sector should be based on different proportions depending on the relative infection risk of on-site workers and the degree of vaccine availability. As long as the number of vaccines is limited and on-site workers are at higher risk of infection, they should be preferred in general. However, as more vaccines become available, countries like Sweden, where the share of occupations that can be done remotely is higher shall start immunize remote workers. In Hungary, where on-site work is dominant in the tradable sector, continued vaccination of on-site workers is more beneficial.