By Guillermo Cruces, Martin Cicowiez, Guillermo Falcone & Jorge Puig / June-2021 /
Increases in tobacco taxation reduce the consumption of tobacco products and improve health outcomes. Substantial increases in tobacco taxes can even increase aggregate employment in the medium term. The results from CEDLAS’s computable general equilibrium model for Argentina show that a simulated substantial increase in tobacco taxation induces a zero-net change in overall employment in the economy. Increased tobacco taxes may shift jobs from tobacco-related sectors to other sectors of the economy, but the overall impact on the total number of jobs is negligible.