Economic Benefits of COVID-19 Screening Tests with a Vaccine Rollout

This note estimates the costs and benefits of a nationwide COVID-19 screening testing program in the presence of vaccine distribution. Even for an optimistic vaccine rollout scenario, a well-designed federally-funded screening testing program, coupled with self-isolation of those who test positive, pays for itself in terms of increased GDP and is projected to save 20,000 or more lives. The sooner the testing program is put in place, the greater are its net economic benefits. This note updates the December 9, 2020 version to include updated deaths data, later dates for rolling out the screening testing program, and the spread of more contagious variants such as the B.1.1. 7 variant.

Economic Benefits of COVID-19 Screening Tests

We assess the economic value of screening testing programs as a policy response to the ongoing COVID-19 pandemic. We find that the fiscal, macroeconomic, and health benefits of rapid SARS-CoV-2 screening testing programs far exceed their costs, with the ratio of economic benefits to costs typically in the range of 2-15 (depending on program details), not counting the monetized value of lives saved. Unless the screening test is highly specific, however, the signal value of the screening test alone is low, leading to concerns about adherence. Confirmatory testing increases the net economic benefits of screening tests by reducing the number of healthy workers in quarantine and by increasing adherence to quarantine measures. The analysis is undertaken using a behavioral SIR model for the United States with 5 age groups, 66 economic sectors, screening and diagnostic testing, and partial adherence to instructions to quarantine or to isolate.