Subsidising the spread of COVID-19: Evidence from the UK'S Eat-Out-to-Help-Out Scheme∗

Abstract

This paper documents that a large-scale government subsidy aimed at encouraging people to eat out in restaurants in the wake of the first 2020 COVID-19 wave in the United Kingdom has had a significant causal impact on new cases, accelerating the subsequent second COVID-19 wave. The scheme subsidised 50% off the cost of food and non-alcoholic drinks for an unlimited number of visits in participating restaurants on Mondays-Wednesdays from 3-31 August 2020. Areas with higher take-up saw both a notable increase in new COVID-19 infection clusters within a week of the scheme starting and a deceleration in infections within two weeks of the program ending. Similarly, areas that exhibited notable rainfall during the prime lunch and dinner hours on the days the scheme was active record lower infection incidence - a pattern that is also measurable in mobility data - and non-detectable on days during which the discount was not available or for rainfall outside the core lunch and dinner hours.