nep-iue New Economics Papers
on Informal and Underground Economics
Issue of 2023‒06‒12
three papers chosen by
Catalina Granda Carvajal
Universidad de Antioquia

  1. Ethical behavior, auditing strength, and tax evasion: A worldwide perspective By Ramzi Benkraiem; Ali Uyar; Merve Kilic; Friedrich Schneider
  2. Toward an Understanding of Tax Amnesties: Theory and Evidence from a Natural Field Experiment By Patricia Gil; Justin E. Holz; John A. List; Andrew Simon; Alejandro Zentner
  3. The Dynamics of Labour Market Polarization in Chile: An Analysis of the Link Between Technical Change and Informality By Delaporte, Isaure; Peña, Werner

  1. By: Ramzi Benkraiem (Audencia Business School); Ali Uyar; Merve Kilic; Friedrich Schneider
    Date: 2021–06
  2. By: Patricia Gil; Justin E. Holz; John A. List; Andrew Simon; Alejandro Zentner
    Abstract: In modern economies, when debt and trust issues arise, a partial forgiveness policy is often the solution to induce payment and increase disclosure. For their part, governments around the globe continue to use tax amnesties as a strategy to allow debtors to make amends for past misdeeds in exchange for partial debt forgiveness. While ubiquitous, much remains unknown about the basic facts of how well amnesties work, for whom, and why. We present a simple theoretical construct that provides both economic clarity into tax amnesties as well as insights into the necessary behavioral parameters that one must estimate to understand the consequences of tax amnesties. We partner with the Dominican Republic Tax Authorities to design a natural field experiment that is linked to the theory to estimate key causal mechanisms. Empirical results from our field experiment, which covers 125, 452 taxpayers who collectively owe $5.2 billion (5.5% of GDP) in known debt, highlight the import of deterrence laws, beliefs about future amnesties, and tax morale for debt payment and increased disclosure. Importantly, we find large short run effects: our most effective treatment (deterrence) increased payments of known debt by 25% and hidden debt by 48%. Further, we find no evidence of our intervention backfiring on subsequent tax payments.
    JEL: C93 H2
    Date: 2023–05
  3. By: Delaporte, Isaure; Peña, Werner
    Abstract: In spite of the growing literature on polarization, relatively little is known about the individual-level patterns underlying the decline of routine occupations and its link with informal employment in a middle-income country context. To shed light on this, we examine the ows of formal and informal workers into and out of routine and non-routine occupations over the period 1980-2015 in Chile. Using rich longitudinal data from the Social Protection Survey of Chile, we first reconstruct individuals' occupational trajectories by classifying individuals into different states at a monthly frequency. We then use a series of multilevel competing risk event history models and a decomposition ow approach to study the ows underlying the decline of routine occupations over time. Our results suggest a process of displacement and occupational downgrading for routine manual workers: workers in routine manual formal employment become increasingly unemployed or use informality as a buffer against job loss, and workers in routine manual informal employment become unemployed or transit to non-routine manual informal occupations. By contrast, workers in routine cognitive occupations seem to be relatively more protected against job displacement and occupational downgrading. Lastly, we find that the decrease in the share of routine occupations in Chile is mostly due to a decrease in the in ow transition rate from unemployment as well as an increase in the out ow transition rates to unemployment and informality.
    Keywords: Occupations, Tasks, Routinization, Labour Market Displacement, Unemployment, Informality
    JEL: E24 E26 J21 J23 J24 O30
    Date: 2023

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