Just the Flu? Examining Externality Benefits of Influenza Vaccination in the Labor Market

This study investigates the effects of influenza vaccination in the United States on labor market outcomes. I exploit a random variation in the match between the viruses present in the vaccine and those in circulation to estimate the impact of influenza vaccination on employment and wages. The findings indicate a positive association between vaccination and labor market outcomes in high- and low-contact non-tradable sectors. However, this association is small and not statistically significant in tradable sectors. The results suggest that the main mechanisms behind this relationship are an increase in labor productivity and a surge in aggregate demand driven by higher labor income of workers affected by a labor productivity shock. These findings provide new evidence that aggregate supply shocks in some sectors may cause demand fluctuations in sectors that are not directly affected.