Income Inequality, Vaccinations and the COVID-19 Death Rate Gap

Researchers and journalists have examined the role of income inequality in COVID-19 deaths since the first confirmed U.S. case was reported in early 2020. Did the availability of vaccines improve or worsen such disparities in the U.S.?

In a March Regional Economist article, St. Louis Fed economist and Vice President Juan Sánchez and Research Associate Olivia Wilkinson examined the progression of death rates among counties with disparate average household incomes from 2020-21 and the impact of uneven vaccination rates.

Their findings suggested that income inequality did play a role in pandemic deaths.

“Overall, counties with the highest household income averages experienced lower incidences of COVID-19 deaths and were more likely to have adult residents with completed COVID-19 vaccinations than lower-income counties,” the authors wrote.

How County Size and Population Age Played a Role

Sánchez and Wilkinson used data from the Internal Revenue Service (IRS) to group counties by their average household income. They sorted the counties by income into five groups (quintiles), with each group containing about the same total population. The first quintile comprised the lowest-income counties and the fifth quintile had the highest-income counties.

The authors noted that at the start of the pandemic, the highest-income counties quickly recorded the highest COVID-19 death rate compared with the other four groups. However, by October 2020, the cumulative death rate in the lowest-income counties surpassed those of the other groups.

The authors hypothesized two reasons for the change in the pattern of deaths:

• Age: The share of population that was 65 years and older was higher in the lowest-income quintile than in the highest-income quintile. They noted that this difference explained about a quarter of the discrepancy.
• Population: The average population of counties in the lowest-income quintile was 30% of the average for counties in the highest-income quintile. The authors pointed out that the first wave of COVID-19 infections hit large cities hard, before strict lockdowns and other measures in the summer of 2020 caused death rates to decline. In contrast, rural areas, which had more restricted access to health care, were hit harder by the second and third waves of the virus.

Who Was Vaccinated?

Though the COVID-19 vaccine was first rolled out by the end of 2020, it didn’t become available to all U.S. adults until April 19, 2021.

At this point, vaccination rates among the five quintiles began to diverge, the authors observed. They noted that as of Dec. 1, 2021, about 70% of adults in the highest-income quintile of counties were fully vaccinated, while only half of those in the lowest-income quintile were fully vaccinated.

The authors explained that vaccine hesitancy may have played a role in the disparate rates of vaccination. Survey data showed that the vaccine hesitancy rate was higher for people with only a high school diploma than for people with at least a college degree. They noted that 49% of adults in the lowest-income group of counties had at least some college education, compared with 72% for those in the highest-income group.

The Trends Continue to Diverge

Sánchez and Wilkinson found that the divergence in COVID-19 death rates accelerated in 2021. By the end of the year, the rate of cumulative COVID-19 deaths in the lowest-income group of counties was 2.5 times the rate for the highest-income group, the authors stated. This was much stronger than in 2020, when the rate for the lowest-income group of counties was 1.35 times the rate for the highest-income group.

“The evidence above suggests that income inequality in COVID-19 deaths has emerged primarily during 2021 and had widened by the end of the year,” the authors concluded.