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Beyond BLS

Beyond BLS briefly summarizes articles, reports, working papers, and other works published outside BLS on broad topics of interest to MLR readers.

October 2022

The positive effects of the measles vaccine on long-term labor market outcomes

Summary written by: Lawrence H. Leith

The development of vaccines and their systematic and widespread use in the United States represent an important advancement in the nation’s public health. Smallpox, for example, has been largely eradicated because of vaccines, not only in the United States but also throughout the rest of the world. Similarly, the development of vaccines for cholera and anthrax have nearly eliminated their occurrence among humans. The measles vaccine was introduced in 1963, and vaccination rates rose quickly, which reduced morbidity and mortality from the disease. Although several studies have examined the public health advantages of the measles vaccine, its effects on long-term labor market outcomes have not been addressed. In a recent article titled “The long-term effects of measles vaccination on earnings and employment” (American Economic Journal: Economic Policy, May 2022), economist Alicia Atwood evaluates changes in employment and earnings in the United States after the measles vaccine was introduced.

Using data from the U.S. Census Bureau and the Centers for Disease Control and Prevention, Atwood analyzes the effects that the measles vaccination had on U.S. labor market outcomes during the 2000–17 period. She looks at measles incidence rates by state for the 1952–75 period and compares them with state vaccination rates after 1963. Because evidence shows that people are more susceptible to other infectious childhood diseases for up to 5 years after having had the measles, Atwood also examines statewide incidence rates for mumps, rubella, pertussis, and chicken pox—before and after the measles vaccine. For her labor market analysis, Atwood uses data from the Census Bureau’s American Community Survey (ACS) for 2000 to 2017. She limits her study to people who were ages 25 to 60 at the time of the survey. The ACS has the added advantage of providing the birth state of the survey participants. This advantage allows Atwood to connect her labor market analysis to her data on statewide measles incidence and vaccination rates during the 1952–75 period.

Atwood’s research design allows her to exploit the notable change in the measles incidence rate that occurred after the vaccine was introduced. She uses a “difference-in-difference identification strategy,” which takes advantage of differences across states in pre- and postvaccine measles incidence and vaccination rates. Atwood evaluates labor market outcomes for people by their birth year and the state in which they were born. This approach enables her to connect survey participants with the data on incidence and vaccination rates. She argues that differences across the states and regions in prevaccine measles incidence rates and the resulting differences in the incidence of measles and other infectious diseases after the vaccine was introduced affected human capital accumulation considerably. For example, children who do not contract measles and other diseases are more likely to be healthier in general during their childhoods, which leads to more productive school years, compared with children who do contract these diseases.

Atwood estimates that people who were born in a state with average measles prevaccine incidence rates and who had lifetime exposure to the measles vaccine earned, on average, $447 more per year than those without exposure to the vaccine, a 1.1-percent increase in their annual income as adults. In addition, she finds that exposure to the measles vaccine lowers the probability of living in poverty, increases people’s chances of being employed, and does not affect the number of hours worked in a week. The latter finding suggests that workers’ income gains are achieved through increased productivity, rather than by working more hours. Atwood concludes her article by calculating the potential economic benefits of the measles vaccine. She estimates that if all 171 million people ages 25 to 65 in 2019 experienced herd immunity from measles as children, then as much as $76.4 billion in personal income that year could be attributed to productivity gains resulting from the measles vaccine.