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Does Tax Evasion Affect Economic Crime?

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  • Amedeo Argentiero
  • Bruno Chiarini
  • Elisabetta Marzano

Abstract

This paper examines the effect of tax evasion on criminal activities in Italy. Specifically, we consider three types of crime that are related to economic determinants: property crimes (including robbery, theft and car theft), fraud and usury. We estimate different econometric models using annual data from the Italian provinces (NUTS‐3 level) for the 2004–12 period. We find that tax evasion positively affects economic crimes, and our results suggest that tax evasion is an incentive to engage in criminal activities, in addition to more standard determinants that we include in the analysis, such as labour market opportunities and deterrence. Moreover, these crimes demonstrate different levels of persistence over time and reflect different adjustment costs.

Suggested Citation

  • Amedeo Argentiero & Bruno Chiarini & Elisabetta Marzano, 2020. "Does Tax Evasion Affect Economic Crime?," Fiscal Studies, John Wiley & Sons, vol. 41(2), pages 441-482, June.
  • Handle: RePEc:wly:fistud:v:41:y:2020:i:2:p:441-482
    DOI: 10.1111/1475-5890.12214
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    Cited by:

    1. Amedeo Argentiero & Sandro Casal & Luigi Mittone & Azzurra Morreale, 2021. "Tax evasion and inequality: some theoretical and empirical insights," Economics of Governance, Springer, vol. 22(4), pages 309-320, December.
    2. Victor Barros & João Tovar Jalles & Joaquim Miranda Sarmento, 2021. "Drivers of the Tax Effort: Evidence from a Large Panel," Working Papers REM 2021/0169, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    3. Anna P. Kireenko & Ekaterina N. Nevzorova & Dmitry Yu. Fedotov, 2019. "Sector-Specific Characteristics of Tax Crime in Russia," Journal of Tax Reform, Graduate School of Economics and Management, Ural Federal University, vol. 5(3), pages 249-264.

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    More about this item

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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