In May 2021, Serbian President Aleksandar Vučić announced a new incentive for Serbians to get their COVID-19 inoculations: cash payments. Each fully vaccinated person would receive 3,000 Serbian dinars, equivalent to about $30 in the United States. The policy, aimed at incentivizing Serbs to get vaccinated, may also play a major role in reducing poverty in Serbia. Serbia’s cash incentives to encourage vaccinations have inspired other countries to follow suit with similar strategies.
Poverty in Serbia
Serbia is one of Europe’s most impoverished countries. In 2017, the poverty rate stood at 19.30%. In 2020, the unemployment rate was around 9%, a drastic decline from its peak of 24% in 2012. Poverty rates are particularly high in the rural and southern regions of the country. In an environment of widespread poverty, $30 is a significant incentive that “equates to around 5% of the country’s average monthly salary.”
How Cash Incentives Can Reduce Poverty
Serbia’s cash incentives could be an effective way of reducing poverty. A 2019 study in Kenya showed that cash transfers to impoverished families had a significant impact not only on the recipients but on the entire local community. The study found that each dollar of aid increased economic activity in the region by $2.60. President Aleksandar Vučić’s cash incentives might provide a similar economic boost in Serbia’s cash-poor economy.
Cash Payments Boost Vaccination Rates
The advantages of Serbia’s cash incentives are far-reaching. By providing a strong monetary incentive, the Serbian government increased the number of people who chose to get vaccinated. The public health benefits of a vaccinated country are obvious, but a vaccinated county will also boost Serbia’s economy. Economists universally agree that vaccination programs will add billions of dollars to the global economy within the next few years.
The World Economic Forum states that by ending the pandemic, “10 major economies could be $466 billion better off by 2025.” With vaccinations, workers will be able to resume their everyday jobs, businesses can reopen and the economy can flourish. Greater wages will mean greater prosperity for everyone. Due to these economic benefits, Serbia’s vaccination program will likely pay for itself many times over.
Cash Payment Successes
Serbia’s cash incentive strategy may already be paying off. As of August 4, 2021, almost 40% of Serbia’s population is fully vaccinated, significantly more than the majority of Serbia’s Balkan neighbors. Neighboring Bosnia and Herzegovina has only a 7% vaccination rate, and Bulgaria, only 15%. Perhaps these countries, both of which have their own poverty problems, would benefit from Serbia’s vaccination strategy.
Serbia is not the only country to offer rewards for COVID-19 inoculations. In neighboring Romania, Bran Castle offered visitors free admission if they came to receive their shots. Additionally, the U.S. state of West Virginia offered $100 awards to anyone getting a vaccine. Vaccination will allow an individual entry into lotteries where participants will have the chance to win cars, scholarships and even a million-dollar grand prize.
Serbia’s program, however, is one of the first and most ambitious programs to encourage COVID-19 vaccinations. With a cash incentive strategy, Serbia demonstrates how a single action can provide several benefits, reducing poverty at the same time.
– Thomas Brodey