Fabio Martinenghi, University of Newcastle - The Concentrated Cost of Coercion: Labour-Market Consequences of Vaccine Mandates for Non-Compliers

Title:   The Concentrated Cost of Coercion: Labour-Market Consequences of Vaccine Mandates for Non-Compliers

Abstract: Strong mandates are a double-edged sword. While their high penalties tend to lead to high compliance, they also concentrate the policy's cost on the minority who do not comply. This is ethically problematic and can lead to political backlash. From a measurement perspective, it follows that the cost of such coercive policies should be measured on those who do not comply, not averaged over everyone they target.

We address this in two ways. First, we define the policy-relevant estimand for coercive policies. While for a policy that provides direct benefits to the people who comply, the policy-relevant population of interest is the people moved to treatment, under a coercive one it is the people it cannot move, the non-compliers. Second, we illustrate this empirically, exploiting Western Australia's sector-specific COVID-19 employment vaccine mandates, a state that never used localised lockdowns—a challenging confounder in other comparable settings.

Applying stacked difference-in-differences to linked administrative data, we find that real annual earnings among non-compliers fell by about 11 percent in the first fully mandated fiscal year, roughly A$15,900 per worker in present value over three years, and employment fell 2.8 percentage points at the peak. Non-compliers are at most 22.8 percent of the mandated workforce, so the cost they bear is over four times the conventional intention-to-treat estimate over the whole mandated population.

Presenter: Fabio Martinenghi, University of Newcastle

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