Tax Rates with Corruption: Labour-market Effects. Empirical Cross-country Comparisons on OECD Countries
AbstractThe paper investigates how tax rates, corruption and institutional aspects of the labour market influence the size of the segments of the labour market such as unemployment, employment, self-employment and activity in the hidden economy. The novelty of our approach is the theoretical justification of the interaction between the perception of taxes and of corruption, as well as the establishment of a new concept and variable, the subjective tax rate. Alternative regression calculations are carried out on data for OECD countries for the period 1995 to 2000. The tests confirm the validity of the new variable and the results imply the need for a more sophisticated policy approach for influencing labour market outcomes.
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Bibliographic InfoPaper provided by Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences in its series IEHAS Discussion Papers with number 0604.
Date of creation: 15 May 2006
Date of revision: 15 May 2006
Taxation; corruption; labour market; hidden economy;
Find related papers by JEL classification:
- D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
- E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
- J2 - Labor and Demographic Economics - - Demand and Supply of Labor
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-05-27 (All new papers)
- NEP-EEC-2006-05-27 (European Economics)
- NEP-LTV-2006-05-27 (Unemployment, Inequality & Poverty)
- NEP-PBE-2006-05-27 (Public Economics)
- NEP-PUB-2006-05-27 (Public Finance)
- NEP-REG-2006-05-27 (Regulation)
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