Labor market institutions, taxation and the underground economy
The paper aims at qualifying the links between labor-market-institutions, taxation, tax monitoring, and underground economic activity. The proposed model is a continuous time matching model with one commodity roduced either overground or underground. Underground economic activity arises because of partial compliance with regulations and tax contributions imposed by the government. Vacancies and workers search are directed at a specific labor market. Workers are heterogenous in the subjective cost they face when operating in the irregular sector. Analytical and numerical investigations suggest that interactions between regular and irregular activities can affect standard results of policy interventions. In that respect, the paper supports the view that policies aiming at increasing individuals benefits of participating in the regular sector are more desirable than a deterrence policy.
(This abstract was borrowed from another version of this item.)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Pestieau, Pierre & Possen, Uri M., 1991.
"Tax evasion and occupational choice,"
Journal of Public Economics,
Elsevier, vol. 45(1), pages 107-125, June.
- PESTIEAU, Pierre & POSSEN, Uri M., . "Tax evation and occupational choice," CORE Discussion Papers RP -967, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Pestieau, P. & Possen, U.M., 1988. "Tax Evasion And Occupational Choice," Papers 404, Cornell - Department of Economics.
- Pestieau, P. & Possen, U., 1990. "Tax evasion and occupational choice," CORE Discussion Papers 1990033, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Simon Johnson & Daniel Kaufman & Andrei Shleifer, 1997. "The Unofficial Economy in Transition," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(2), pages 159-240.
- Joel Slemrod & Shlomo Yitzhaki, 1985.
"The Optimal Size of a Tax Collection Agency,"
NBER Working Papers
1759, National Bureau of Economic Research, Inc.
- Jung, Young H. & Snow, Arthur & Trandel, Gregory A., 1994. "Tax evasion and the size of the underground economy," Journal of Public Economics, Elsevier, vol. 54(3), pages 391-402, July.
- Friedrich Schneider & Dominik Enste, 1999.
"Shadow Economies Around the World - Size, Causes, and Consequences,"
CESifo Working Paper Series
196, CESifo Group Munich.
- Friedrich Schneider & Dominik Enste, 2000. "Shadow Economies Around the World; Size, Causes, and Consequences," IMF Working Papers 00/26, International Monetary Fund.
- Dubin, Jeffrey A. & Wilde, Louis L., 1988. "An Empirical Analysis of Federal Income Tax Auditing and Compliance," National Tax Journal, National Tax Association, vol. 41(1), pages 61-74, March.
- Clotfelter, Charles T, 1983. "Tax Evasion and Tax Rates: An Analysis of Individual Returns," The Review of Economics and Statistics, MIT Press, vol. 65(3), pages 363-73, August.
- Thomas, Jim, 1999. "Quantifying the Black Economy: 'Measurement without Theory' Yet Again?," Economic Journal, Royal Economic Society, vol. 109(456), pages F381-89, June.
- Lemieux, Thomas & Fortin, Bernard & Frechette, Pierre, 1994. "The Effect of Taxes on Labor Supply in the Underground Economy," American Economic Review, American Economic Association, vol. 84(1), pages 231-54, March.
- Andreoni, J. & Erard, B. & Feinstein, J., 1996.
9610r, Wisconsin Madison - Social Systems.
- Allingham, Michael G. & Sandmo, Agnar, 1972. "Income tax evasion: a theoretical analysis," Journal of Public Economics, Elsevier, vol. 1(3-4), pages 323-338, November.
- Dominik H. Enste & Friedrich Schneider, 2000. "Shadow Economies: Size, Causes, and Consequences," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 77-114, March.
- Namkee Ahn & Sara La De Rica, 1997. "The underground economy in Spain: an alternative to unemployment?," Applied Economics, Taylor & Francis Journals, vol. 29(6), pages 733-743.
- Tanzi, Vito, 1999. "Uses and Abuses of Estimates of the Underground Economy," Economic Journal, Royal Economic Society, vol. 109(456), pages F338-47, June.
- Watson, Harry, 1985. "Tax evasion and labor markets," Journal of Public Economics, Elsevier, vol. 27(2), pages 231-246, July.
- PESTIEAU, Pierre & POSSEN, Uri, .
"How do taxes affect occupational choice?,"
CORE Discussion Papers RP
-1007, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Loayza, Norman V., 1996.
"The economics of the informal sector: a simple model and some empirical evidence from Latin America,"
Carnegie-Rochester Conference Series on Public Policy,
Elsevier, vol. 45(1), pages 129-162, December.
- Loayza, Norman A., 1997. "The economics of the informal sector : a simple model and some empirical evidence from Latin America," Policy Research Working Paper Series 1727, The World Bank.
- Schneider, Friedrich, 1986. " Estimating the Size of the Danish Shadow Economy Using the Currency Demand Approach: An Attempt," Scandinavian Journal of Economics, Wiley Blackwell, vol. 88(4), pages 643-68.
- Pommerehne, Werner W. & Frey, Bruno S., 1992. "The effects of tax administration on tax morale," Discussion Papers, Series II 191, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
When requesting a correction, please mention this item's handle: RePEc:eee:pubeco:v:88:y:2004:i:1-2:p:395-418. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.