Researchers publish study on unemployment claims one year after implementation of Philadelphia’s sweetened beverage tax
PHILADELPHIA—A study on a key economic marker of the impact of Philadelphia’s beverage tax was published today in the scientific journal PLOS ONE. This study found that the unemployment rate in Philadelphia industries potentially affected by the beverage tax did not change in the year after the tax was implemented.
The study examined changes in unemployment benefit claims filings in Philadelphia compared to its neighboring counties two years prior to and 14 months after the City levied a 1.5 cent per ounce excise tax on sugar- and artificially-sweetened beverages. It is the first peer-reviewed study on economic impacts after a beverage tax in the US. This means the study and its findings were vetted by expert independent scientists during scientific peer-review, which no other reports have accomplished.
Researchers from the University of Pennsylvania, Harvard University, and the Philadelphia Department of Public Health analyzed data from the Pennsylvania Department of Labor to determine if there was a change in new monthly unemployment claims filings after the tax. The study looked at supermarkets, soft drink manufacturers, other industries potentially affected by the tax (such as restaurants, retail stores, and gas stations), and total claims filings across all industries combined. The study compared changes in Philadelphia to those seen in surrounding counties as well as Allegheny County, which contains Pittsburgh.
Results showed that there were no changes to unemployment claims in Philadelphia compared to neighboring counties after the tax took effect for any of the business sectors they studied. Unemployment declined in Philadelphia similar to both the surrounding counties and Allegheny County in each of the sectors studied. Lead researcher Dr. Hannah Lawman from the Philadelphia Department of Public Health said, “There were no statistically significant changes in unemployment claims in Philadelphia after the tax, and those findings were robust across several ways to analyze the data.”
The researchers concluded that public claims of increased unemployment within the first year following the implementation of the Philadelphia beverage tax are not supported by this analysis. Future work should examine employment outcomes and include longer follow-up periods.
Taxes on sweetened drinks have been supported by the World Health Organization, the American Academy of Pediatrics, and numerous other public health groups as a potential strategy to decrease the epidemic of childhood and adult obesity and diabetes. Current projections suggest that, without significant changes, more than 40% of children born in the year 2000 and more than 50% of children of color will develop diabetes by 2050.
Philadelphia’s sweetened drink tax also supports strategies with significant potential health and economic benefits including PHL preK, community schools, and rehabilitating the city’s parks, recreation centers and libraries as part of the Philadelphia Rebuild program. As a recent PEW report noted, prior to the tax-funded Rebuild program, Philadelphia’s per capita spending on parks and recreation centers was less than half that of other cities.
The researchers made the data analyzed in this study publicly available. “Since there is controversy about the beverage tax, we wanted the public to be able to see the raw numbers for themselves and not have to rely only on what others say about them,” said Dr. Lawman. The full study and the data can be downloaded here.