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Cross-Border Health and Productivity Effects of Alcohol Policies

Author

Listed:
  • Johansson, Per

    (Uppsala University)

  • Pekkarinen, Tuomas

    (VATT, Helsinki)

  • Verho, Jouko Kullervo

    (VATT, Helsinki)

Abstract

This paper studies the cross-border health and productivity effects of alcohol taxes. We estimate the effect of a large cut in the Finnish alcohol tax on mortality, alcohol related illnesses and work absenteeism in Sweden. This tax cut led to large differences in the prices of alcoholic beverages between these two countries and to a considerable increase in cross-border shopping. The effect is identified using differences-in-differences strategy where changes in these outcomes in regions near the Finnish border are compared to changes in other parts of northern Sweden. We use register data where micro level data on deaths, hospitalisations and absenteeism is merged to population-wide micro data on demographics and labour market outcomes. Our results on the effect of the Finnish tax cut on mortality and alcohol-related hospitalisations in Sweden are very imprecise. However, we find that workplace absenteeism increased by 5% for males and by 13% for females near the Finnish border as a result of the tax cut.

Suggested Citation

  • Johansson, Per & Pekkarinen, Tuomas & Verho, Jouko Kullervo, 2012. "Cross-Border Health and Productivity Effects of Alcohol Policies," IZA Discussion Papers 6389, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp6389
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    6. DeCicca, Philip & Kenkel, Donald & Liu, Feng, 2013. "Excise tax avoidance: The case of state cigarette taxes," Journal of Health Economics, Elsevier, vol. 32(6), pages 1130-1141.
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    Cited by:

    1. David S Jacks & Krishna Pendakur & Hitoshi Shigeoka, 2021. "Infant Mortality and the Repeal of Federal Prohibition," The Economic Journal, Royal Economic Society, vol. 131(639), pages 2955-2983.
    2. Avdic, Daniel & von Hinke, Stephanie, 2021. "Extending alcohol retailers’ opening hours: Evidence from Sweden," European Economic Review, Elsevier, vol. 138(C).
    3. Henri Salokangas, 2016. "The long-term effects of alcohol availability on mortality: Evidence from an alcohol reform," Discussion Papers 115, Aboa Centre for Economics.
    4. Pinna Pintor, Matteo & Fumagalli, Elena & Suhrcke, Marc, 2024. "The impact of health on labour market outcomes: A rapid systematic review," Health Policy, Elsevier, vol. 143(C).
    5. Colin P. Green & Maria Navarro Paniagua, 2016. "Play Hard, Shirk Hard? The Effect of Bar Hours Regulation on Worker Absence," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(2), pages 248-264, April.
    6. Nelson, Jon P. & McNall, Amy D., 2016. "Alcohol prices, taxes, and alcohol-related harms: A critical review of natural experiments in alcohol policy for nine countries," Health Policy, Elsevier, vol. 120(3), pages 264-272.
    7. Stefan K. Lhachimi, 2021. "Revisiting the Swedish alcohol stasis after changes in travelers’ allowances in 2004: petrol prices provide a piece of the puzzle," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 22(2), pages 187-193, March.
    8. Alexander S. Skorobogatov, 2021. "The effect of alcohol sales restrictions on alcohol poisoning mortality: Evidence from Russia," Health Economics, John Wiley & Sons, Ltd., vol. 30(6), pages 1417-1442, June.

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    More about this item

    Keywords

    alcohol taxes; health effects of alcohol; cross-border shopping;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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