We analyze optimal vaccine subsidies in a model integrating disease epidemiology into a market with rational economic agents. The focus is on an intensive vaccine campaign to quell an epidemic in the short run. Across a range of market structures, positive vaccine externalities and optimal subsidies peak for diseases that spread quickly, but not so quickly that everyone is driven to be vaccinated. We assess the practical relevance of this peak—as well as the existence of increasing social returns to vaccination and optimality of universal vaccination—in calibrations to the Covid-19 pandemic.

We study a randomized evaluation of a merit scholarship program in which Kenyan girls who scored well on academic exams had school fees paid and received a grant. Girls showed substantial exam score gains, and teacher attendance improved in program schools. There were positive externalities for girls with low pretest scores, who were unlikely to win a scholarship. We see no evidence for weakened intrinsic motivation. There were heterogeneous program effects. In one of the two districts, there were large exam gains and positive spillovers to boys. In the other, attrition complicates estimation, but we cannot reject the hypothesis of no program effect.