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Social Distance and Informal Employment Reporting

Author

Listed:
  • Roberto Dell'Anno

    (Department of Economics and Statistics - University of Salerno - Italy and CELPE)

  • Marcello Puca

    (Department of Economics and Statistics - University of Salerno - Italy, CELPE and CSEF)

Abstract

Measuring illicit behavior such as tax evasion and underground economy through surveys is challenging due to social desirability bias. We examine how interviewer–respondent social distance affects the reporting of informal employment in an anonymous survey conducted by university students. Using variation in the relationship between inter- viewer and respondent, we estimate probit models and find that disclosure is lowest when the interviewer is a relative or friend, and higher when the interviewer is either an immediate family member or someone with no prior connection. This non-monotonic pattern suggests that both trust and anonymity facilitate truthful reporting, while intermediate social proximity increases self-censorship. The findings highlight a previously overlooked source of measurement error in survey-based estimates of informal labor.

Suggested Citation

  • Roberto Dell'Anno & Marcello Puca, 2025. "Social Distance and Informal Employment Reporting," CELPE Discussion Papers 177, CELPE - CEnter for Labor and Political Economics, University of Salerno, Italy.
    • Handle: RePEc:sal:celpdp:021754
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    Keywords

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    JEL classification:

    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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