Undeclared Work, Employer Tax Compliance, and Audits
AbstractThis article analyzes employer labor tax evasion and the impact on this evasion of tax inspections by a labor inspectorate. The analysis is based on a unique data set built by linking two sources of information: a data set of individual artisan firms and an individual audit data set. Our data describe the universe of artisan firms in Piedmont (Italy) in 2000 to 2005. Using information on firm characteristics and tax evasion observed directly from the audit exercise, we estimate undeclared work in the artisan sector, and we then evaluate the impact of tax inspections on employer labor tax declarations. We find that inspections could actually be counterproductive, decreasing both tax compliance and tax revenues.
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Bibliographic InfoArticle provided by in its journal Public Finance Review.
Volume (Year): 39 (2011)
Issue (Month): 1 (January)
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- Leandro Elia & Edoardo Di Porto, 2011. "Undeclared Work And Wage Inequality," Working Papers 201108, Università della Calabria, Dipartimento di Economia, Statistica e Finanza (Ex Dipartimento di Economia e Statistica).
- Edoardo Di Porto & Leandro Elia & Cristina Tealdi, 2013. "The "emersion" effect: an ex post and ex ante social program evaluation on labor tax evasion in Italy," Working Papers 2/2013, IMT Institute for Advanced Studies Lucca, revised Jun 2013.
- Pickhardt, Michael & Prinz, Aloys, 2014. "Behavioral dynamics of tax evasion – A survey," Journal of Economic Psychology, Elsevier, vol. 40(C), pages 1-19.
- Eduardo Zilberman, 2011. "Audits or Distortions: The Optimal Scheme to Enforce Self-Employment Income Taxes," Textos para discussÃ£o 590, Department of Economics PUC-Rio (Brazil).
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