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on Informal and Underground Economics |
| By: | Giese, Henning; Heinemann-Heile, Vanessa |
| Abstract: | This study analyzes whether and to what extent the provision of public goods and firms' trust in local governments' handling of local business tax revenues are associated with firms' willingness to pay local business tax. Using survey data on German small- and medium-sized firms, we find that the average perceived provision of public goods is not associated with the willingness to pay local business tax. Separating public goods into private- and business-related public goods, we find that the perception of public goods related to the private sphere of firms' decision-makers is associated with an increase in firms' willingness to pay local business tax by about 10%. However, public goods related to the business sphere show no similar association. Contradictory to the perceived provision of public goods, we find surprisingly no association between firms' willingness to pay local business tax and the actual provision of public goods. Trust in local governments' handling of tax revenue increases firms' willingness to pay local business tax significantly, with an effect size of about twice as large as for the perception of provided private-related public goods. These findings indicate that the handling of tax revenues exerts a more pronounced influence on firms' willingness to pay than the actual utilization of these revenues. Documenting tax revenue implications, we further show that the average willingness to pay local business tax within a local government is associated with a significant decrease in tax avoidance by about 10%. Our results inform local governments about how the provision of public goods and the building of trust can sustainably contribute to firms' willingness to pay local business tax. Thus, our results contribute to the understanding of how taxes can be efficiently collected and effectively used. |
| Keywords: | Tax Perception, Business Taxation, Tax Avoidance, Public Goods, Tax Revenue |
| JEL: | H25 H26 H41 H71 D91 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:arqudp:303521 |
| By: | Neave O'Clery; Juan Chaparro; Andres Gomez-Lievano; Eduardo Lora |
| Abstract: | What drives formal employment creation in developing cities? We find that larger cities, home to an abundant set of complex industries, employ a larger share of their working age population in formal jobs. We propose a hypothesis to explain this pattern, arguing that it is the organised nature of formal firms, whereby workers with complementary skills are coordinated in teams, that enables larger cities to create more formal employment. From this perspective, the growth of formal employment is dependent on the ability of a city to build on existing skills to enter new complex industries. To test our hypothesis, we construct a variable which captures the skill-proximity of cities' current industrial base to new complex industries, termed 'complexity potential'. Our main result is that complexity potential is robustly associated with subsequent growth of the formal employment rate in Colombian cities. |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2410.06971 |
| By: | ASIANI, Freddy |
| Abstract: | The General Labor Inspectorate in the Democratic Republic of Congo (DRC) faces multidimensional challenges in the enforcement of labor standards, exacerbated by a combination of economic, political, and institutional factors. This article explores the duality in the application of labor standards through the lens of Schrödinger’s Cat Paradox, illustrating how these standards can be both respected and violated, depending on the observers and actors involved. Through a review of the literature, an in-depth analysis of labor inspection practices, and a discussion on the role of various actors (government, employers, unions, and international organizations), we demonstrate how the complex dynamics of the Congolese environment influence the effectiveness of labor standards enforcement. |
| Keywords: | Labor Inspection, Labor Standards, Democratic Republic of Congo, Schrödinger’s Paradox, Compliance, Corruption, Trade Unions, International Organizations. |
| JEL: | J80 K31 O17 |
| Date: | 2024–10–03 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122269 |