Employment effects of an increase in sugar tax

Abstract

This paper examined the changes in employment in industries with close ties to sugary products sales following an increase in sugar tax in Norway in January 2018. Using the data from Statistics Norway and having removed seasonality, interrupted time series analysis was conducted. Data on food manufacture, beverage manufacture as well as wholesale and retail trade excluding motor vehicles and motorcycles was studied. Additional analysis was conducted for robustness specifications. The paper discovered a small and negative, statistically significant intercept change in employment in wholesale trade sector. This could be indicating some short-term effects of the increased sugar tax. Evidence from beverages manufacturing sector show a significant and positive post-tax trend change. This could indicate some long-term effects. Wholesale trade sector experienced a decrease in the number of people employed. The beverages sector witnessed an increase in the employment level after the tax was increased. No other significant effects were discovered with the available data. Robustness tests failed to confirm the validity of the results. Warranty with respect to the outcomes must be taken. It is unlikely that the employment changes found in the paper were caused by an increased sugar tax.