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How different are the Spanish self-employed workers by underreporting their incomes?

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  • Diego Martínez López

    ()
    (Dpto. Economía, Mét. Cuantitativos e H.ª Econ.)

Abstract

This paper offers estimates of the underreporting of income by self-employed workers using the Spanishhousehold surveys over the period 2006-2009. We use the well-known model by Pissarides and Weber (1989)but extending its interpretation for admitting also the (lower) concealment of income by salary workers. Ourresults show that the reported income by self-employed has to be increased by about 25-30 percent to obtainthe level of income which would equal the level of underreporting by employees. Our estimates are robust tochanges in specification, endogeneity and non-linearities. Este artículo ofrece estimaciones de la ocultación de rentas por parte de los trabajadores autónomosespañoles usando Encuestas de Presupuestos Familiares en el periodo 2006-2009. Para ello empleamos elconocido modelo de Pissarides y Weber (1989), cuya interpretación extendemos para admitir también la(menor) ocultación de renta por parte de los trabajadores asalariados. Nuestros resultados muestran que larenta reconocida por los trabajadores autónomos españoles debe incrementarse entre un 25 y 30 por cientopara obtener el nivel de renta que igualaría el grado de ocultación de los empleados. Dichas estimacionesson robustas a cambios en la especificación, endogeneidad y no linealidades.

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File URL: http://www.ivie.es/downloads/docs/wpasec/wpasec-2011-09.pdf
File Function: Fisrt version / Primera version, 2011
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Bibliographic Info

Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie EC with number 2011-09.

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Length: 28 pages
Date of creation: Oct 2011
Date of revision:
Publication status: Published by Ivie
Handle: RePEc:ivi:wpasec:2011-09

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Related research

Keywords: ocultación; encuestas familiares; consumo de comida; evasión fiscal. underreporting; household surveys; food consumption; tax evasion;

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References

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  1. Lindsay Tedds, 2010. "Estimating the income reporting function for the self-employed," Empirical Economics, Springer, vol. 38(3), pages 669-687, June.
  2. Engström, Per & Holmlund, Bertil, 2006. "Tax Evasion and Self-Employment in a High-Tax Country: Evidence from Sweden," Working Paper Series 2006:12, Uppsala University, Department of Economics.
  3. Alm, James & Torgler, Benno, 2006. "Culture differences and tax morale in the United States and in Europe," Journal of Economic Psychology, Elsevier, vol. 27(2), pages 224-246, April.
  4. Kolm, Ann-Sofie & Nielsen, Søren Bo, 2007. "Under-reporting of income and Labour Market Performance," Working Papers 10-2007, Copenhagen Business School, Department of Economics.
  5. Erik Hurst & Geng Li & Benjamin Pugsley, 2011. "Are household surveys like tax forms: evidence from income underreporting of the self-employed," Finance and Economics Discussion Series 2011-06, Board of Governors of the Federal Reserve System (U.S.).
  6. Torrini, Roberto, 2005. "Cross-country differences in self-employment rates: the role of institutions," Labour Economics, Elsevier, vol. 12(5), pages 661-683, October.
  7. Mar�A Jes�S Freire-Ser�N & Judith Panad�S, 2008. "Does Tax Evasion Modify the Redistributive Effect of Tax Progressivity?," The Economic Record, The Economic Society of Australia, vol. 84(267), pages 486-495, December.
  8. Edvard Johansson, 2005. "An estimate of self-employment income underreporting in Finland," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 31, pages 99-109.
  9. Wooldridge, Jeffrey M., 1995. "Selection corrections for panel data models under conditional mean independence assumptions," Journal of Econometrics, Elsevier, vol. 68(1), pages 115-132, July.
  10. Panayiota Lyssiotou & Panos Pashardes & Thanasis Stengos, 2004. "Estimates of the black economy based on consumer demand approaches," Economic Journal, Royal Economic Society, vol. 114(497), pages 622-640, 07.
  11. Herb J. Schuetze, 2002. "Profiles of Tax Non-compliance Among the Self-Employed in Canada: 1969 to 1992," Canadian Public Policy, University of Toronto Press, vol. 28(2), pages 219-237, June.
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