The Impact of Tobacco Consumption on Employment and Productivity in Viet Nam

This Policy Note was written by Development and Policies Research Center in Viet Nam and the Tobacconomics team. The policy note assesses the impact of raising tobacco taxation on tobacco consumption, employment, and productivity based on existing evidence in Viet Nam. The researchers find that more than 45 million Vietnamese adults are at risk from tobacco-related morbidity and mortality, threatening workforce productivity and burdening the Social Security Fund. As a result, evidence suggests that the total income lost in 2022 was between VND 3.3 trillion and 5.9 trillion. On the other hand, employment in the tobacco industry makes up only 0.3% of total employment. Although raising tobacco taxes would lead to a small loss of jobs in the tobacco sector, the net effect would be positive since a decrease in tobacco use would lead to an increase in consumption of other goods and services. The policy note concludes with recommendations for policy makers to increase tobacco taxes to improve productivity and increase the number of jobs in the economy.

This policy note is part of series discussing the impact of tobacco tax increases on: consumer behavior and illicit trade.