nep-iue New Economics Papers
on Informal and Underground Economics
Issue of 2017‒05‒14
four papers chosen by
Catalina Granda Carvajal
Universidad de Antioquia

  1. Growth in the Shadows: Effect of the Shadow Economy on U.S. Economic Growth over More Than a Century By Goel, Rajeev K.; Saunoris, James W.; Schneider, Friedrich
  2. Whistleblowing vs random audit: An experimental test of relative effciency By Cécile Bazart; Mickael Beaud; Dimitri Dubois
  3. Public pensions and elderly informal employment: Evidence from a change in retirement age in South Africa By Alessandro Tondini; Cally Ardington; Ingrid Woolard
  4. Los trabajadores colombianos carecen de derechos sociales By César Giraldo

  1. By: Goel, Rajeev K. (Illinois State University); Saunoris, James W. (Eastern Michigan University); Schneider, Friedrich (University of Linz)
    Abstract: This paper provides a long-term view by studying the effect of the underground or shadow economy on economic growth in the Unites States over the period 1870 to 2014. Shadow activities might spur or retard economic growth depending on their interactions with the formal sector and impacts on the provision of public goods. Nesting the analysis in a standard neo-classical growth model, we use a relatively new time-series technique to estimate the short-run dynamics and long-run relationship between economic growth and its determinants. Results suggest that prior to WWII the shadow economy had a negative effect on economic growth; however, post-WWII the shadow economy was beneficial for growth. This ambiguity regarding the overall growth impact of the shadow economy is consistent with underlying theoretical arguments.
    Keywords: economic growth, shadow economy, United States, time series
    JEL: E26 O43 O51 K42
    Date: 2017–04
  2. By: Cécile Bazart; Mickael Beaud; Dimitri Dubois
    Abstract: This paper reports an experimental test of the relative effciency of a whistleblowing-based audit scheme compared to a random-based audit scheme. We design a between-subjects laboratory experiment with two treatments: a benchmark with a random-based audit scheme and an alternative treatment in which taxpayers can blow the whistle. Compared to the benchmark, the whistleblowing-based audit scheme (i) decreases the monetary amount of tax evasion, (ii) improves the targeting of evaders and (iii) raises the tax levy
    Date: 2017–05
  3. By: Alessandro Tondini; Cally Ardington (SALDRU, University of Cape Town); Ingrid Woolard (SALDRU, University of Cape Town)
    Abstract: We investigate the impact of a reform of the public, non-contributory pension system in South Africa, which lowered the age of retirement from 65 to 60 for men only. Despite no explicit requirement to stop working when the public pension is received, we provide clear evidence that this reform triggered a large drop in old-age male employment. We show that this drop comes entirely from informal employment, while formal jobs, even if not covered by private pension schemes, are not affected. These results are consistent with the view that a significant portion of informal employment occurs out of "necessity", and that, in particular at an old-age, workers choose not to work informally when they receive other income support. Simple back-of-the-envelope calculations reveal that the public pension alone can explain up to 10% less informal employment at the national level.
    Date: 2017
  4. By: César Giraldo
    Abstract: El trabajo informal en Colombia es muy alto para los estándares de la región. Se trata de tra-bajadores cuya inserción económica no está atada a la seguridad social. Ahora, el gobierno pretende poner a tributar a esos sectores con la creación del monotributo, pero es difícil exigirle impuestos a una población que carece de derechos sociales: la tributación es un contrato social. La inseguridad económica y social ha obligado a las familias a volverse unidades económicas y asumir la protección social, sin embargo, ello tiene efectos sobre la configuración del mundo social que están por estudiarse.
    Keywords: Trabajo precario, informalidad, monotributo, clientelismo, derechos sociales, economía popular
    JEL: A14 I38 J41 J81
    Date: 2017–04–11

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