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on Informal and Underground Economics |
| By: | Ellora Derenoncourt; François Gerard; Lorenzo Lagos; Claire Montialoux |
| Abstract: | How do minimum wages affect informality? We study the near-doubling of the real minimum wage from 2000 to 2009 in Brazil, where 46% of the workforce is informal. Using labor force surveys covering the informal sector, we show the minimum wage exhibits near full passthrough to informal employees working in formal firms, about half of all informal employees. The formal-to-informal reallocation elasticity with respect to the formal-wage is small: -0.28. Our findings illustrate how minimum wages can positively affect living standards for workers thought beyond the reach of labor law, a sizable share of the workforce in developing economies. |
| JEL: | J23 J46 J88 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34445 |
| By: | Janet Currie; Lucy G. Hackett; Fernanda Marquez-Padilla |
| Abstract: | Many low and middle-income countries are working to expand health insurance to previously uncovered people by creating health insurance programs intended for low-income people who would otherwise lack insurance coverage. Two concerns have been raised about these programs. First, people may be “crowded out” of private facilities and into public ones, increasing public expense and possibly degrading care through crowding. Second, public insurance could encourage informality by reducing the gap in compensation between formal sector and informal sector workers. We examine these questions in the context of Mexico’s Seguro Popular (SP) using longitudinal administrative data on childbirth. We focus on women with more than one observed birth and ask how SP affects the choice of provider for those whose first observed birth was in a public hospital, a private hospital, or a separate system of hospitals serving formal sector workers. We also look at how SP affects the utilization of care and newborn health. Because SP enrollment is endogenous, we instrument it using the rollout of a second program, SMSXXI, that provided health care for young children and enrolled other family members in SP. We find that the expansion of SMSXXI increased SP coverage of pregnant women. This in turn led to a higher probability of delivering in a public hospital, especially among those who had previously delivered in a private hospital. We find little impact of SP enrollment on the utilization of care or newborn health, with the notable exception that women who previously delivered in a private hospital were more likely to start prenatal care in the first trimester when they switched to SP, indicating a greater willingness to seek preventive care when it is free. |
| JEL: | I13 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34465 |
| By: | José María Durán-Cabré (Universitat de Barcelona & IEB); Alejandro Esteller-Moré (Universitat de Barcelona & IEB); Christos Kotsogiannis (Tax Administration Research Centre (TARC), University of Exeter Business School & CESIfo); Luca Salvadori (Universitat Autònoma de Barcelona & BSE & IEB & Tax Administration Research Centre (TARC), University of Exeter Business School) |
| Abstract: | Enforcing wealth tax compliance among high-net-worth individuals is particularly challenging. Using administrative data on the Net Wealth Tax for Catalan taxpayers over the 2011–2020 period, this paper evaluates the impact of audits on voluntary compliance. The evidence suggests that wealth tax audits do enhance compliance, but the impact is short-lived — and driven by taxpayers rebalancing their tax evasion and avoidance responses. On the institutional side, the results indicate that Spain’s overlapping tax audit mandates can create coordination frictions that reduce the efficiency and effectiveness of audit-based enforcement of the New Wealth Tax. Effective enforcement depends not only on robust audit strategies, but also on coherent institutional design and sound tax policy. |
| Keywords: | Tax Audit Evaluation; Overlapping Tax Audit Mandates; Wealth Tax; Tax Evasion; Tax Compliance |
| JEL: | H26 D31 O17 D02 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ieb:wpaper:doc2025-15 |
| By: | Sya In Chzhen (School of Economics, University of East Anglia) |
| Abstract: | This study investigates the global drivers for the adoption and usage of digital financial services (DFS) using three waves of repeated cross-sectional data from 160 countries, exploiting a pooled logit regression and the Heckman selection model. We predict the impact of proxies of digital nancial services, including mobile money account ownership, mobile or internet transactions, as well as the ownership and usage of credit and debit cards, into the adoption and usage of digital fi nancial services. While con rming ndings from existing literature, our fi ndings highlight several original insights. We fi nd that the diffusion of informal digital fi nancial services begins in countries with negative net migration, whereas the di usion of formal digital fi nancial services begins in countries with positive net migration. Population density is an adverse driver of adoption and usage of informal digital financial services, and of the transition from adopting to using debit cards. The historical level of digital infrastructure has a strong legacy e ect on the usage of digital fi nancial services, at both extensive and intensive margins. Population density is an adverse driver of adoption and usage of informal digital financial services and debit cards, as well as the transition from adopting to using debit cards. This study offers guidance to policymakers and other stakeholders by identifying the global determinants of both adoption and usage of formal and informal digital financial services, independent of market-speci c contexts, and the key determinants influencing the transition from adoption to e ective usage of speci c digital fi nancial services tools. |
| Keywords: | Digital nance; Financial inclusion; Technological di usion; ROC |
| JEL: | C35 G21 O33 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:uea:ueaeco:2025-03 |