nep-iue New Economics Papers
on Informal and Underground Economics
Issue of 2022‒03‒28
nine papers chosen by
Catalina Granda Carvajal
Universidad de Antioquia

  1. Public disclosure of tax information. Compliance tool or social network? By Daniel Reck; Joel Slemrod; Trine Vattø
  2. To Comply or not to Comply: Persistent Heterogeneity in Tax Compliance and Macroeconomic Dynamics By Leonardo Barros Torres; Jaylson Jair da Silveira, Gilberto Tadeu Lima
  3. Do immigrants take or create natives' jobs? Evidence of Venezuelan immigration in Peru By Celia P. Vera; Bruno Jiménez
  4. Demand-led Industrialisation Policy in a Dual-Sector SmallBalance of Payments Constrained Economy By Nomaler, Önder; Spinola, Danilo; Verspagen, Bart
  5. I would like to but I cannot. The determinants of involuntary part-time employment: Evidence from Italy By Gianluca Busilacchi; Giovanni Gallo; Matteo Luppi
  6. Contractual Restrictions and Debt Traps By Ernest Liu; Benjamin N. Roth
  7. Microfinance institution and moneylenders in a segmented rural credit market By Abhirupa Das; Uday Bhanu Sinha
  8. La dimensión territorial del riesgo de informalidad laboral en la Argentina By Trujillo-Salazar, Lucía; Villafañe, Soledad
  9. Trabajo en plataformas en Chile y desafíos para el trabajo decente: situación actual y lineamientos para diseñar políticas públicas dirigidas al sector By Morris, Pablo

  1. By: Daniel Reck; Joel Slemrod; Trine Vattø (Statistics Norway)
    Abstract: We conduct the first-ever study of actual searches done in a public tax disclosure system, analyzing about one million searches done in 2014 and 2015 in Norway. We characterize the social network these searches comprise, including its degree of homophily and reciprocation, and the demographics of targets and searchers. About one-fourth of searches occur within identifiable household and employment networks. Most searchers target people similar to themselves—homophily in network parlance—but young, low-income searchers also target older, successful people and celebrities. A causal research design based on the timing of searches relative to tax filing uncovers no evidence that, upon discovering they were targeted, targets subsequently increase their reported income. The evidence suggests that social comparisons motivate the bulk of searches rather than tax compliance. However, public disclosure may deter evasion even when compliance-motivated searches are rare in equilibrium.
    Keywords: Public disclosure; social network; tax compliance
    JEL: H26 D83 D85
    Date: 2022–03
  2. By: Leonardo Barros Torres; Jaylson Jair da Silveira, Gilberto Tadeu Lima
    Abstract: We set forth an overlapping generations model in which the microdynamics of tax compliance is coupled to the macrodynamics of the economy. We specify the proportion of individuals who do not comply with their tax obligations as endogenously time-varying using the discrete choice approach, which allows considering both deterministic components and idiosyncratically subjective motivations and proclivities (such as tax morale) as drivers of tax compliance. The model replicates (and hence provides an analytical framework for a potential interpretation of) some pieces of evidence on tax evasion. First, heterogeneity in tax compliance exhibits persistence and fluctuations over the long run. Second, the proportion of non-compliant taxpayers varies positively with the tax rate and negatively with the probability of detection of tax evaders. Third, the impact of a change in the proportion of non-compliant taxpayers on the per capita output over the long run is ambiguous.
    Keywords: Tax compliance; discrete choice modeling; tax morale; heterogeneous behavior; macrodynamics
    JEL: H62 H40 C02 C62 E13
    Date: 2022–03–22
  3. By: Celia P. Vera (Universidad de Piura); Bruno Jiménez (Universidad Nacional de La Plata)
    Abstract: Peru is the second largest host nation of Venezuelan migrants. This paper combines newly available data on Venezuelans residing in Peru and the Peruvian Household Survey to assess the impact of migration on natives? labor market outcomes. We first rely upon education-experience groups to define labor markets and find that immigration does not affect the wages of competing native workers. We then slice the labor market into occupations based on the observation that in Peru, immigrants and natives with similar education and experience are likely to work in different occupations. Our instrumental variable estimates confirm the null effect on wages. We finally examine whether natives respond with changes in employment and find that 10 Venezuelan workers create informal employment for 38 Peruvians and displace 13 Peruvians from formal jobs, suggesting a change in the Peruvian employment composition toward informality.
    Keywords: Immigration, education-experience cells, occupation cells, informality
    JEL: J24 J31 J46
    Date: 2022–03
  4. By: Nomaler, Önder; Spinola, Danilo; Verspagen, Bart
    Abstract: This article models the process of structural transformation and catching-up in a demand-led Southern economy constrained by its balance of payments. Starting from the Sraffian Supermultiplier Model, we model a dual-sector small open economy divided between traditional and modern sectors that interacts with a technologically advanced Northern economy. We propose two (alternative) autonomous elements that define the growth rate of this demand-led economy: government spending and exports. Autonomous government spending plays a central role in stimulating demand, and thus is a source of growth of the modern sector. Productivity adjusts to the growth rate of output, given by the growth rate of autonomous expenditure. Drawing from the Structuralist literature, the technologically laggard Southern economy catches up by absorbing technology from the Northern economy, potentially closing the technology gap. The gap affects the income elasticity of exports, bringing a supply-side mediation to the growth rates in line with the Balance of Payments Constrained Model. We observe that a demand-led government policy plays a central role in structural change, pushing the modern sector to a take-off. Also, the economy is stable in terms of capacity utilisation and modern sector employment.
    Keywords: Industrialisation; Catching-up; Balance of Payments; Sraffian Supermultiplier
    Date: 2022–03–23
  5. By: Gianluca Busilacchi; Giovanni Gallo; Matteo Luppi
    Abstract: Over the last two decades, involuntary part-time (IPT) employment has become a more and more pressing issue in Europe, especially in the southern countries, where IPT today constitutes most part-time employment. The dualistic nature of voluntary and involuntary employment creates an opportunity to investigate this type of occupation by looking at the intersection between dualisation and gender. Using INAPP-PLUS data and Probit estimations, this paper aims to shed light on whether the determinants of IPT – at the individual, household and labour market levels – follow the trend of labour dualisation, compared to part-timers in voluntary arrangements. In particular, we aim to determine how dualisation related to these determinants varies according to gender and labour market structural changes. Our results confirm that individual and household characteristics count more than professional ones in determining IPT status, especially concerning the well-known gender differences. However, differentiating the analysis by workers' gender highlights interesting differences pointing at a growing polarisation for female workers driven not only by inequality in the work-family balance distribution but also by structural elements in the labour market.
    Keywords: Involuntary part-time; gender inequality; dualisation; job determinants; labour market
    JEL: J16 J40 Z13
    Date: 2022–02
  6. By: Ernest Liu (Princeton University); Benjamin N. Roth (Harvard University)
    Abstract: Microcredit and other forms of small-scale finance have failed to catalyze entrepreneurship in developing countries. In these credit markets, borrowers and lenders often bargain over not only the interest rate but also implicit restrictions on types of investment. We build a dynamic model of informal lending and show this may lead to endogenous debt traps. Lenders constrain business growth for poor borrowers yet richer borrowers may grow their businesses faster than they could have without credit. The theory offers nuanced comparative statics and rationalizes the low average impact and low demand of microfinance despite its high impact on larger businesses.
    Keywords: credit markets, developing countries
    JEL: E51 O12
    Date: 2020–07
  7. By: Abhirupa Das (Department of Economics, Delhi School of Economics); Uday Bhanu Sinha (Department of Economics, Delhi School of Economics)
    Abstract: The poor heavily rely on informal sources for their capital needs as they lack collateral required by formal institutions. Furthermore, local moneylenders operate in distinct market segments and borrowing opportunities may not be equal for every household.The role of a microfinance institution (MFI) operating in such environment becomes even more crucial. The effectiveness of MFIs in rescuing poor borrowers from ‘clutches of’ moneylenders has been a much-debated topic over the last few decades. This paper attempts to contribute to this debate by presenting a model of competition between a socially motivated MFI and profit-maximising moneylenders in the presence of marketsegmentation. We characterise equilibrium conditions in the presence of market segmentation under scenarios where only moneylenders operate, only MFI operates and finally the case where both co-exist. We find unambiguous benefits arising from the entry of a welfare maximising entity such as an MFI. We also see the values of having local agents like moneylenders on the ground who have information gathering advantages. We conclude that an effective system of both these entities working together can bring about increases in efficiency and welfare. Key Words: microfinance, market segmentation, collateral substitution, mandatory savings, information asymmetry, moral hazard, adverse selection JEL Codes: D82, O16
    Date: 2022–03
  8. By: Trujillo-Salazar, Lucía; Villafañe, Soledad
    Abstract: El propósito de este documento es abordar la dimensión territorial de la informalidad laboral en la Argentina. Se busca producir información sobre el riesgo de informalidad laboral en cada uno de los departamentos censales y analizar las estimaciones realizadas para los contextos subnacionales. Este objetivo es relevante en relación con las heterogeneidades y desigualdades estructurales que se observan tanto en las regiones como entre ellas. Para lograrlo se implementa modelos predictivos a nivel subnacional y se incorporan al análisis, en la medida que la información lo permite, los factores productivos, de configuración empresaria, de disponibilidad de capacidades humanas y configuración de los mercados laborales en los territorios, de manera de aportar a la mirada integral que el fenómeno requiere. El documento brinda un análisis novedoso dado que no existen estudios que hayan hecho estimaciones de la informalidad laboral con el grado de desagregación geográfica que aquí se propone.
    Date: 2021–12–15
  9. By: Morris, Pablo
    Abstract: En este documento se presentan los resultados de un estudio realizado con el fin de caracterizar la situación actual de los trabajadores de plataformas digitales en Chile, en particular de los repartidores y conductores. Con este fin se analizan los datos cuantitativos disponibles, el estado de avance del debate legislativo sobre una ley que proteja a quienes se desempeñan en el sector, y los datos cualitativos recopilados mediante una consulta realizada a trabajadores y especialistas que han participado activamente en el debate público reciente. A partir de esa información se proponen los principales lineamientos que se deben tener en cuenta a los efectos de diseñar políticas públicas que contribuyan a que el trabajo en plataformas se realice en condiciones de trabajo decente. Si esos lineamientos no se aplican, el marco legal que se cree resultará insuficiente para garantizar la inclusión, la protección y la cohesión social.
    Date: 2021–12–29

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