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on Informal and Underground Economics |
| By: | armoa garcia, roger roman |
| Abstract: | This study estimates a monthly index of economic informality for Paraguay using the currency-demand shadow economy framework (Tanzi–Feige). We specify a log-linear cash demand function that includes the real interest rate, the price level (CPI), economic activity (GDP), and tax pressure.Series are transformed (logs and first differences where appropriate) based on ADF/KPSS tests; we also control for seasonality and outliers to support robust inference. The model’s unexplained component is interpreted as a monetary proxy for informality and is normalized to construct the index. Unlike simple accounting ratios (e.g., currency/M2), this approach adjusts for income, prices, and the opportunity cost of holding cash, isolating deviations attributable to the shadow economy. As an extension, we assessed including cooperative credit (CAC) to capture channels parallel to the formal banking system; we found no severe multicollinearity with tax pressure but (at most) moderate correlation, but we excluded CAC from the main specification due to heavy tails and heteroskedasticity. The results yield a parsimonious and stable index across sensitivity exercises (alternative specifications and diagnostic validation), and we discuss policy implications for tax design and payment traceability, together with limitations and avenues for future research. |
| Keywords: | economic informality, shadow money model, Tanzi–Feige, cash demand, underground economy, econometric estimation, Paraguay |
| JEL: | C22 C51 E26 E41 H26 O17 |
| Date: | 2025–08–14 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126167 |
| By: | Celiku, Bledi; Ubfal, Diego Javier; Valdivia, Martin |
| Abstract: | This paper estimates the gender gap in the performance of firms in Peru using representative data on both formal and informal firms. On average, informal female-led firms have lower sales, labor productivity, and profits compared to their male-led counterparts, with differences more pronounced when controlling for observable determinants of firm performance. However, gender gaps are only significant at the bottom of the performance distribution of informal firms, and these gaps disappear at the top of the distribution of informal firms and for formal firms. Possible explanations for the performance gaps at the bottom of the distribution include the higher likelihood of small, female-led firms being home-based, which is linked to lower profits, and their concentration in less profitable sectors. The paper provides suggestive evidence that household responsibilities play a key role in explaining the gender gap in firm performance among informal firms. Therefore, policies that promote access to care services or foster a more equal distribution of household activities may reduce gender productivity gaps and allow for a more efficient allocation of resources. |
| Date: | 2025–09–23 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:111218 |
| By: | Belhaj Zineb (USMBA - Université Sidi Mohamed Ben Abdellah [Fès], FSJES-Fès - Faculté des Sciences Juridiques, Economiques et Sociales de Fès); Nmili Mohamed (FSJES-Fès - Faculté des Sciences Juridiques, Economiques et Sociales de Fès, USMBA - Université Sidi Mohamed Ben Abdellah [Fès]) |
| Abstract: | Taxation is a fundamental pillar of the social contract, embodying the link between the state and its citizens. It relies on voluntary compliance by taxpayers, based on principles of solidarity, fairness, and legality. However, this cooperation is now being undermined by the proliferation of tax non-compliance, whether it be illegal fraud or legally ambiguous practices such as tax evasion or aggressive tax optimization. These forms of transgression, grouped under the concept of tax deviance, contribute to the erosion of the legitimacy of the tax system and weaken trust in public institutions. Far from being limited to simple transgression of tax rules, tax deviance encompasses a variety of behaviors influenced by economic, social, institutional, and psychological factors. The main determinants identified include the perception of tax inequity, the complexity of tax systems, the individual characteristics of taxpayers (level and source of income), and the incentives arising from tax rates and control and penalty mechanisms. From this perspective, the article adopts a qualitative approach based on a narrative review of the literature, aiming to provide a critical synthesis of existing work by highlighting the interaction of these variables in a logic where taxpayers arbitrate between compliance and non-compliance. Keywords : Tax deviance, tax fraud, determinants |
| Abstract: | La fiscalité constitue un pilier fondamental du contrat social, incarnant le lien entre l'État et ses citoyens. Elle repose sur une adhésion volontaire des contribuables, fondée sur des principes de solidarité, d'équité et de légalité. Cependant, cette coopération est aujourd'hui mise à mal par la multiplication des comportements de non-conformité fiscale, qu'ils relèvent de la fraude illégale ou de pratiques juridiquement ambivalentes comme l'évasion ou l'optimisation fiscale agressive. Ces formes de transgression, regroupées sous le concept de déviance fiscale, participent à l'érosion de la légitimité du système fiscal et affaiblissent la confiance envers les institutions publiques. Loin de se limiter à la simple transgression des règles fiscales, la déviance fiscale englobe une diversité de comportements influencés par des facteurs économiques, sociaux, institutionnels et psychologiques. Les principaux déterminants identifiés incluent la perception d'iniquité fiscale, la complexité des dispositifs fiscaux, les caractéristiques individuelles des contribuables (niveau et source de revenu), ainsi que les incitations découlant des taux d'imposition et des mécanismes de contrôle et de sanction. Dans cette perspective, l'article adopte une approche qualitative fondée sur une revue narrative de littérature, visant à proposer une synthèse critique des travaux existants en mettant en lumière l'interaction de ces variables dans une logique où les contribuables arbitrent entre conformité et fraude selon une évaluation rationnelle des coûts et bénéfices |
| Keywords: | African Scientific Journal, Déviance fiscale, Fraude Fiscale, Détérminant |
| Date: | 2025–08–16 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05224913 |
| By: | Christopher Goetz; Henry R. Hyatt; Zachary Kroff; Kristin Sandusky; Martha Stinson |
| Abstract: | Entrepreneurs are known to be key drivers of economic growth, and the rise of online platforms and the broader "gig economy" has led self-employment to surge in recent decades. Yet the young and small businesses associated with this activity are often absent from economic data. In this paper, we explore a novel longitudinal dataset that covers the owners of tens of millions of the smallest businesses: those without employees. We produce three new sets of statistics on the rapidly growing set of nonemployer businesses. First, we measure transitions between self-employment and wage and salary jobs. Second, we describe nonemployer business entry and exit, as well as transitions between legal form (e.g., sole proprietorship to S corporation). Finally, we link owners to their nonemployer businesses and examine the dynamics of business ownership. |
| JEL: | L26 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34252 |
| By: | Karri Vuoristo |
| Abstract: | The paper examines the effects of a value-added tax (VAT) withholding regime implemented in Uganda using administrative data from the Uganda Revenue Authority. By using modern two-way fixed effects models, the research estimates the dynamic effects and finds that firms increase their reported outputs by approximately 17.8 per cent and that the estimated value added increases by around 35 per cent. The study finds no effect on reported inputs and offers suggestive evidence that the positive effect found in outputs and value added might not be persistent across time. |
| Keywords: | Taxation, Tax compliance, withholding VAT, Uganda |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:unu:wpaper:wp-2025-63 |