IDEAS home Printed from https://ideas.repec.org/a/eee/jfpoli/v115y2023ics0306919223000106.html
   My bibliography  Save this article

Employment and wage effects of sugar-sweetened beverage taxes and front-of-package warning label regulations on the food and beverage industry: Evidence from Peru

Author

Listed:
  • Díaz, Juan-José
  • Sánchez, Alan
  • Diez-Canseco, Francisco
  • Jaime Miranda, J.
  • Popkin, Barry M.

Abstract

Peru increased its sugar-sweetened beverage tax by 8 percentage points (from 17% to 25%) in 2018 and in 2019 imposed front-of-package warning labels on processed and ultra-processed foods and beverages high in sugar, saturated fats, and sodium or containing trans fats. We assess the pre-COVID-19 impacts of these two policies on aggregate formal employment and average wages in the food and beverage industry. In the analysis we use monthly administrative data from the Ministry of Labor in Peru for 127 manufacturing industries from January 2016 through February 2020 and pair an interrupted time series analysis with the synthetic control method. Overall we find that the sugar-sweetened beverage tax increase and the front-of-package label regulations did not result in job or wage losses. These results are consistent with outcomes from previous studies that have separately looked at the effects of sugar-sweetened beverage taxes (in the United States and Mexico) and front-of-package label regulations (in Chile). Our key contribution is that we assess the effects of both policies for the same country. Consistent with the global literature, our findings suggest that, due to industry substitutions and other actions, employment and wages were not impacted even in industries affected by both policies in a short time. The lack of job and wage losses in the Peruvian experience, the scope of the country’s policies, and the form of implementation can advise other countries engaging in similar reforms.

Suggested Citation

  • Díaz, Juan-José & Sánchez, Alan & Diez-Canseco, Francisco & Jaime Miranda, J. & Popkin, Barry M., 2023. "Employment and wage effects of sugar-sweetened beverage taxes and front-of-package warning label regulations on the food and beverage industry: Evidence from Peru," Food Policy, Elsevier, vol. 115(C).
    • Handle: RePEc:eee:jfpoli:v:115:y:2023:i:c:s0306919223000106
    DOI: 10.1016/j.foodpol.2023.102412
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306919223000106
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.foodpol.2023.102412?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Marcela Reyes & Lindsey Smith Taillie & Barry Popkin & Rebecca Kanter & Stefanie Vandevijvere & Camila Corvalán, 2020. "Changes in the amount of nutrient of packaged foods and beverages after the initial implementation of the Chilean Law of Food Labelling and Advertising: A nonexperimental prospective study," PLOS Medicine, Public Library of Science, vol. 17(7), pages 1-37, July.
    2. Mounsey, Sarah & Veerman, Lennert & Jan, Stephen & Thow, Anne Marie, 2020. "The macroeconomic impacts of diet-related fiscal policy for NCD prevention: A systematic review," Economics & Human Biology, Elsevier, vol. 37(C).
    3. Marinello, Samantha & Leider, Julien & Pugach, Oksana & Powell, Lisa M., 2021. "The impact of the Philadelphia beverage tax on employment: A synthetic control analysis," Economics & Human Biology, Elsevier, vol. 40(C).
    4. Michael Essman & Lindsey Smith Taillie & Tamryn Frank & Shu Wen Ng & Barry M Popkin & Elizabeth C Swart, 2021. "Taxed and untaxed beverage intake by South African young adults after a national sugar-sweetened beverage tax: A before-and-after study," PLOS Medicine, Public Library of Science, vol. 18(5), pages 1-17, May.
    5. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2011. "Synth: An R Package for Synthetic Control Methods in Comparative Case Studies," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 42(i13).
    6. Barry M Popkin & Shu Wen Ng, 2021. "Sugar-sweetened beverage taxes: Lessons to date and the future of taxation," PLOS Medicine, Public Library of Science, vol. 18(1), pages 1-6, January.
    7. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
    8. Hannah G Lawman & Sara N Bleich & Jiali Yan & Michael T LeVasseur & Nandita Mitra & Christina A Roberto, 2019. "Unemployment claims in Philadelphia one year after implementation of the sweetened beverage tax," PLOS ONE, Public Library of Science, vol. 14(3), pages 1-10, March.
    9. Ariel Linden, 2015. "Conducting interrupted time-series analysis for single- and multiple-group comparisons," Stata Journal, StataCorp LP, vol. 15(2), pages 480-500, June.
    10. Alberto Abadie, 2021. "Using Synthetic Controls: Feasibility, Data Requirements, and Methodological Aspects," Journal of Economic Literature, American Economic Association, vol. 59(2), pages 391-425, June.
    11. Paraje, Guillermo & Colchero, Arantxa & Wlasiuk, Juan Marcos & Sota, Antonio Martner & Popkin, Barry M., 2021. "The effects of the Chilean food policy package on aggregate employment and real wages," Food Policy, Elsevier, vol. 100(C).
    12. Powell, L.M. & Wada, R. & Persky, J.J. & Chaloupka, F.J., 2014. "Employment impact of sugar-sweetened beverage taxes," American Journal of Public Health, American Public Health Association, vol. 104(4), pages 672-677.
    13. Pérez, Fernando & Ghurra, Omar & Grandez, Rodrigo, 2017. "Un Indicador Líder de Actividad Real para el Perú," Working Papers 2017-001, Banco Central de Reserva del Perú.
    14. Samantha Marinello & Julien Leider & Lisa M Powell, 2021. "Employment impacts of the San Francisco sugar-sweetened beverage tax 2 years after implementation," PLOS ONE, Public Library of Science, vol. 16(6), pages 1-16, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Samantha Marinello & Julien Leider & Lisa M Powell, 2021. "Employment impacts of the San Francisco sugar-sweetened beverage tax 2 years after implementation," PLOS ONE, Public Library of Science, vol. 16(6), pages 1-16, June.
    2. Paraje, Guillermo & Colchero, Arantxa & Wlasiuk, Juan Marcos & Sota, Antonio Martner & Popkin, Barry M., 2021. "The effects of the Chilean food policy package on aggregate employment and real wages," Food Policy, Elsevier, vol. 100(C).
    3. Sadeghi, Ali & Kibler, Ewald, 2022. "Do bankruptcy laws matter for entrepreneurship? A Synthetic Control Method analysis of a bankruptcy reform in Finland," Journal of Business Venturing Insights, Elsevier, vol. 18(C).
    4. Nicholas Sheard, 2022. "The Railway Gauge Muddle in Australia," Centre of Policy Studies/IMPACT Centre Working Papers g-327, Victoria University, Centre of Policy Studies/IMPACT Centre.
    5. World Bank, 2020. "Evidence Brief," World Bank Publications - Reports 33968, The World Bank Group.
    6. Kramer, Niklas & Lessmann, Christian, 2023. "The Effects of Carbon Trading: Evidence from California’s ETS," MPRA Paper 116796, University Library of Munich, Germany.
    7. Brett Parker, 2021. "Death Penalty Statutes and Murder Rates: Evidence From Synthetic Controls," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 18(3), pages 488-533, September.
    8. McCloud, Nadine, 2022. "Does domestic investment respond to inflation targeting? A synthetic control investigation," International Economics, Elsevier, vol. 169(C), pages 98-134.
    9. Marinello, Samantha & Leider, Julien & Pugach, Oksana & Powell, Lisa M., 2021. "The impact of the Philadelphia beverage tax on employment: A synthetic control analysis," Economics & Human Biology, Elsevier, vol. 40(C).
    10. Dennis Shen & Peng Ding & Jasjeet Sekhon & Bin Yu, 2022. "Same Root Different Leaves: Time Series and Cross-Sectional Methods in Panel Data," Papers 2207.14481, arXiv.org, revised Oct 2022.
    11. Runst, Petrik & Höhle, David, 2022. "The German eco tax and its impact on CO2 emissions," Energy Policy, Elsevier, vol. 160(C).
    12. Libby Hattersley & Alan Fuchs & Alberto Gonima & Lynn Silver & Kate Mandeville, 2020. "Business, Employment, and Productivity Impacts of Sugar-Sweetened Beverages Taxes," World Bank Publications - Reports 34082, The World Bank Group.
    13. Edoardo Masset, 2022. "Conflict and Child Mortality in Mali: A Synthetic Control Analysis," Population and Development Review, The Population Council, Inc., vol. 48(4), pages 1097-1123, December.
    14. Thomas Barnebeck Andersen, 2023. "The Cost of a Currency Peg during the Great Recession," Open Economies Review, Springer, vol. 34(2), pages 255-279, April.
    15. Ben Katoka & Huck‐ju Kwon, 2021. "A Paradox of New Deal and Foreign Aid for Fragile States in Sub‐Saharan Africa," Global Policy, London School of Economics and Political Science, vol. 12(5), pages 639-652, November.
    16. John Charles Bradbury, 2022. "Does hosting a professional sports team benefit the local community? Evidence from property assessments," Economics of Governance, Springer, vol. 23(3), pages 219-252, December.
    17. Joseph Fry, 2023. "A Method of Moments Approach to Asymptotically Unbiased Synthetic Controls," Papers 2312.01209, arXiv.org, revised Mar 2024.
    18. Barney Hartman‐Glaser & Mark Thibodeau & Jiro Yoshida, 2023. "Cash to spend: IPO wealth and house prices," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 51(1), pages 68-102, January.
    19. John Charles Bradbury, 2022. "The impact of sports stadiums on localized commercial activity: Evidence from a Business Improvement District," Journal of Regional Science, Wiley Blackwell, vol. 62(1), pages 194-217, January.
    20. Daniel Albalate & Germà Bel & Ferran A. Mazaira-Font, 2020. "Ensuring Stability, Accuracy and Meaningfulness in Synthetic Control Methods: The Regularized SHAP-Distance Method," IREA Working Papers 202005, University of Barcelona, Research Institute of Applied Economics, revised Apr 2020.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jfpoli:v:115:y:2023:i:c:s0306919223000106. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/foodpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.