Audit, tax compliance and undeclared work: an empirical analysis
To encourage tax compliance towards the Italian tax contributive system, the Italian Social Security Institute (INPS) develops a number of audits intothe Italian firms. The aim of these inspections is to detect possible evasions and to threaten cheating enterpreneurs with penalties, if necessary. In our case "to cheat" means to hide a part of the labor forces to the authority, underdeclaring their real dimensions and thus to evade a certain amount of social-insurance taxes. In this paper we particularly focus on showing how it is possible to use individual audit data to better understand the relation between inspections and tax compliance, and consequently the relation between the policy of auditing and undeclared work. A new source of data was built for this purpose, merging information about firms with individual audit data. Our analysis is developed as follow: after a brief introduction, we describe the dataset and we give some details on the procedures used by inspectors. Then we show a simple model of auditing in order to enlighten relation between audit policy and work force declaration. The second part of the analisys, mainly empirical, attempts to explain how to estimate undeclared work starting from our new source of data, after that, we assess two microeconometric policy evaluation analysis. Our aim is to nderstand the relation that lies between the policy of auditing and a) the propensity to declare workers; b) the number of black workers implied in the labour market.
|Date of creation:||2009|
|Contact details of provider:|| Postal: Via Real Collegio, 30, 10024 Moncalieri (To)|
Web page: http://www.laboratoriorevelli.it/
More information through EDIRC
References listed on IDEAS
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.:
- Kimball, Miles S, 1990.
"Precautionary Saving in the Small and in the Large,"
Econometric Society, vol. 58(1), pages 53-73, January.
- Miles S. Kimball, 1989. "Precautionary Saving in the Small and in the Large," NBER Working Papers 2848, National Bureau of Economic Research, Inc.
- Deaton, Angus & Irish, Margaret, 1984. "Statistical models for zero expenditures in household budgets," Journal of Public Economics, Elsevier, vol. 23(1-2), pages 59-80.
- Scotchmer, Suzanne & Slemrod, Joel, 1989. "Randomness in tax enforcement," Journal of Public Economics, Elsevier, vol. 38(1), pages 17-32, February.
- Suzanne Scotchmer & Joel Slemrod, 1988. "Randomness in Tax Enforcement," NBER Working Papers 2512, National Bureau of Economic Research, Inc.
- 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.
- David Aristei & Luca Pieroni, 2008. "A double-hurdle approach to modelling tobacco consumption in Italy," Applied Economics, Taylor & Francis Journals, vol. 40(19), pages 2463-2476.
- David Aristei & Luca Pieroni, 2007. "A Double-Hurdle Approach to Modelling Tobacco Consumption in Italy," Quaderni del Dipartimento di Economia, Finanza e Statistica 29/2007, Università di Perugia, Dipartimento Economia.
- Arthur Snow & Ronald S. Warren Jr., 2007. "Audit Uncertainty, Bayesian Updating, and Tax Evasion," Public Finance Review, , vol. 35(5), pages 555-571, September.
- Allen McDowell, 2003. "From the help desk: hurdle models," Stata Journal, StataCorp LP, vol. 3(2), pages 178-184, June.
- Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
- Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-161, January.
- Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, vol. 39(5), pages 829-844, September.
- Francis Vella, 1998. "Estimating Models with Sample Selection Bias: A Survey," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 127-169.
- Alm, James & Blackwell, Calvin & McKee, Michael, 2004. "Audit Selection and Firm Compliance With a Broad-Based Sales Tax," National Tax Journal, National Tax Association, vol. 57(2), pages 209-227, June.
- Menezes, C & Geiss, C & Tressler, J, 1980. "Increasing Downside Risk," American Economic Review, American Economic Association, vol. 70(5), pages 921-932, December.
- Segal, Uzi & Spivak, Avia, 1990. "First order versus second order risk aversion," Journal of Economic Theory, Elsevier, vol. 51(1), pages 111-125, June.
- Uzi Segal & Avia Spivak, 1988. "First Order Versus Second Order Risk Aversion," UCLA Economics Working Papers 540, UCLA Department of Economics.
- Mullahy, John, 1986. "Specification and testing of some modified count data models," Journal of Econometrics, Elsevier, vol. 33(3), pages 341-365, December.
- Rothschild, Michael & Stiglitz, Joseph E., 1971. "Increasing risk II: Its economic consequences," Journal of Economic Theory, Elsevier, vol. 3(1), pages 66-84, March.
- Blundell, Richard & Meghir, Costas, 1987. "Bivariate alternatives to the Tobit model," Journal of Econometrics, Elsevier, vol. 34(1-2), pages 179-200.
- Snow, Arthur & Warren, Ronald Jr., 2005. "Tax evasion under random audits with uncertain detection," Economics Letters, Elsevier, vol. 88(1), pages 97-100, July. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:cca:wplabo:94. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Giovanni Bert)
If references are entirely missing, you can add them using this form.