nep-iue New Economics Papers
on Informal and Underground Economics
Issue of 2015‒11‒01
five papers chosen by
Catalina Granda Carvajal
Universidad de Antioquia

  1. Behavioral effects of tax withholding on tax compliance: Implications for information initiatives By Christian Vossler; Michael McKee
  2. Tax Reporting Behavior: Underreporting Opportunities and Prepopulated Tax Returns By David Bruner; Michael Jones; Michael McKee; Christian Vossler
  3. The impact of public transport expansions on informality: the case of the São Paulo Metropolitan Region By Ana Isabel Moreno-Monroy; Frederico Ramos
  4. Creation of formal employment in a context of implementation of the Decent Work Agenda: the Territories of Bahian Identity By Laumar Neves de Souza; Helcio de Medeiros Junior; Tatiana de Andrade Spinola
  5. Forced Savings in the Soviet Republics: Re-examination By Shida, Yoshisada

  1. By: Christian Vossler; Michael McKee
    Abstract: Using a framed field experiment with working adults and deliberate tax framing, this study reports on the effects of tax withholding on subsequent individual tax reporting behavior. We find interesting behavioral asymmetries related to tax withholding position, in particular that tax underreporting is increasing in the level of expected as well as unanticipated tax underwithholding, but is largely invariant to the level of tax over-withholding and unexpected decreases in liability. Two information initiatives we explore – group compliance information and information related to fiscal exchange – serve to affect tax reporting in part through its influence on withholding. A third information initiative – a service that resolves uncertainty over tax liability – decreases the level of evasion by over twice as much for those who have underversus over-withheld. Using information from an extensive taxpayer questionnaire, we find several interesting associations between taxpayer characteristics and experimental tax reporting behavior. Key Words: tax withholding; tax information services; social norms; tax reporting and enforcement; experimental methods; framed field experiment
    JEL: H21 H26 C91 C92
    Date: 2015
  2. By: David Bruner; Michael Jones; Michael McKee; Christian Vossler
    Abstract: Key Words:
    Date: 2015
  3. By: Ana Isabel Moreno-Monroy; Frederico Ramos
    Abstract: The São Paulo Metropolitan Region (SPMR) displays a strong core-periphery divide. Central areas concentrate the bulk of formal jobs while peripheral areas display high incidence of informal employment. This pattern is reinforced by a large deficit in urban transport provision. Against this background, we estimate the impact of expansions of the public transport system on local informality rates for the SPMR between 2000 and 2010. We compare the average changes in informality in areas which received new public transport infrastructure with the average changes in areas which were supposed to receive infrastructure according to official plans, but did not because of delays. After controlling for endogenous selection, we find that informality decreased on average 15 percent faster in areas receiving new public transport infrastructure compared to areas that faced project delays.
    Keywords: Urban transport; informality; Brazil; impact evaluation
    JEL: F12 O14 O17 R12
    Date: 2015–10
  4. By: Laumar Neves de Souza; Helcio de Medeiros Junior; Tatiana de Andrade Spinola
    Abstract: The positive dynamics of the national economy in relation to the generation of jobs formal has been an issue that has generated a great deal of interest in Brazilian society and, consequently, has gained much space in more different vehicles of communication, in the course of the last decade. The challenge in this work is to describe some specific traits of the formal labor market, in the period covering the years 2001 to 2010, prioritizing a form of analysis that assesses the singularities of employment developments with record book signed in the Territories of Bahian Identity. In fact, we tried to build a kind of profile of formal employment in the state, evaluating its evolution over time, identifying especially who is the worker who has entered this market in previous decade, which the level of salary offered, the level of education required, which the sectors that generated jobs and the territories of state identity that most benefited from with new jobs. In spatial terms, a large part of the quota of jobs generated occurred in a small number of municipalities, because according to the information obtained only 27 of a total of 417 cities of Bahia gathered 62.6% of jobs, and the Territories of Identity responsible for 60.2% of the jobs were the Metropolitana de Salvador and the Portal do Sertão, in which the municipalities of Salvador and Feira de Santana, the two largest cities of Bahia, stand out. The existence of a set of investments implemented in Bahia that resulted in an increase in the demand of work did not reach the majority of the territories. The excessive concentration of jobs generated reflects the great inequality of opportunities of employment the worker baiano in relations of higher quality. In general, the largest volume of freshmen in jobs had 18 to 24 years, high school education, realizing wages between 0.51 and 1.5 minimum wage and in companies located in the Identity Territory Metropolitana de Salvador. The workers who disagreed with these parameters, is the personal attributes, residence or expected return (salary range), are only eligible to precarious relations, taking the informality their port of entry into the labor market. For this reason, in according with census data, in 2010 there were more than half of labor relations characterized as informal in Bahia. Therefore, if there is to be an agenda of State that intends to reduce regional inequality and personal opportunities of worker baiano, a proposal which identifies itself with the assumptions of the Decent Work Agenda for the Bahia, this research provides evidence to policymakers a look less cyclical and more structural.
    Keywords: economy baiana; formal employment; labor market; territories of identity
    JEL: J23 J31 J38
    Date: 2015–10
  5. By: Shida, Yoshisada
    Abstract: The current paper empirically examines the determinants of household savings rates in the Soviet republics, by utilizing the panel data of an aggregated household budget survey in the period from 1965 to 1989. Earlier studies claimed that increases in household savings starting from the late 1950s were the direct result of worsening shortages of consumer goods; therefore, they considered Soviet households' savings to be involuntary ones and that households were "forced" to save under severe shortage conditions in the official consumer market. But they failed to fully investigate this problem mainly because of unavailability of data on household incomes and expenditures and of ignorance of a widespread informal economy ("second economy"). When the informal economy could at least partly provide households with opportunities to spend their money on lacking goods, households would be able to choose whether to save money and stand in line for scarce goods at the official retail shops, or move to the informal market. This understanding leads to the implication that there existed neither involuntary nor forced savings. In order to tackle this unsolved research problem, the Soviet households' savings rate function is estimated by taking into account shortages, the informal economy, and other factors, among them life-cycle factors, and then the "forced savings rate" is calculated. The main findings of this study are as follows: Firstly, even taking into account these factors, there existed Soviet-unique factors, namely the shortage factor, informal factor, and demand-spillover effect. Secondly, the magnitudes of these three factors varied among regions, so forced savings rates also varied. According to our estimation results, forced savings in the Slavic and Baltic regions accounted for more than 40% of the total savings just before the collapse of the Soviet Union, while those in the Caucasian and Central Asian regions accounted for less than 10%.
    Keywords: forced savings, shortages, informal economy, centrally planned economies, Soviet Union
    JEL: N34 P24 P32 P36 P51
    Date: 2015–10

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