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on Informal and Underground Economics |
| By: | Rodrik, Dani; Sandhu, Rohan |
| Abstract: | Manufacturing generates very little employment in the developing world. Urban jobs are predominantly informal, unproductive, and in services. It seems unlikely that manufacturing will be able to absorb the new increments to the labor force or create more productive jobs for those that are already stuck in petty services. Raising productivity in services has been traditionally difficult, but it has now become a necessary imperative. We discuss and provide evidence for four broad strategies: (a) incentivizing large, productive firms to expand their employment; (b) enhancing productive capabilities of smaller firms through the provision of public inputs; (c) providing workers or firms technologies that explicitly complement low-skill labor; (d) vocational training with “wrap-around†services to enhance job seekers’ employability, job retention, and eventual promotion. |
| Keywords: | Services |
| JEL: | O40 O17 O25 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19249 |
| By: | Dany Bahar (Center for Global Develoment); Jesús Marcano (Corporación Andina de Fomento (CAF)); Carlos Moya (MEG Inteligencia de Datos); Roberto Patiño (Institute 2100) |
| Abstract: | Over 8 million Venezuelans have left their country since 2014, mostly settling in Latin America. Using original survey data from nearly 3, 000 Venezuelan migrants across nine Latin American countries, this paper examines how legal immigration status shapes labor market integration and settlement intentions. Legal status is strongly associated with better labor market outcomes: migrants with documentation are 30.5 percentage points more likely to receive wages through a bank account, 21.6 pp more likely to hold a written employment contract, and similarly more likely to contribute to social security, pay taxes, and hold formal jobs—associations that are robust across specifications, bootstrap inference, and leave-one-out analysis. Legal status alone, however, is not associated with wanting to stay in the host country: legal and undocumented migrants report virtually identical settlement intentions. There is suggestive evidence that a link between legal status and settlement may materialize when legal status is paired with formal employment, particularly written contracts. The findings point to the potential value of complementing regularization programs with measures that facilitate formal employment, financial inclusion, and labor market integration. |
| Date: | 2026–05–21 |
| URL: | https://d.repec.org/n?u=RePEc:cgd:ppaper:394 |
| By: | Hernandez, Manuel; Gan, Li; Zhang, Yike |
| Abstract: | This paper examines how intensified border enforcement affects employers’ reliance on temporary legal workers in U.S. agriculture. Using administrative data on H-2A certifications (2015-2025), we exploit the geographic concentration of a Texas state initiative that expanded immigration enforcement along the U.S.-Mexico boundary to compare border and interior counties before and after implementation. Results show a large, persistent increase in H-2A certifications in border counties relative to interior ones. Complementary analyses indicate that these increases were not accompanied by changes in agricultural activity or local economic conditions. Overall, the findings suggest increased reliance on formal guest-worker channels following reinforced border control. |
| Keywords: | Agricultural and Food Policy |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea26:404371 |
| By: | Paradisi, Matteo; Sartori, Elia |
| Abstract: | We study tax audit policies when the Tax Authority predicts true income using an inference model. When taxpayers are aware of model-based audit rules, using an inference model shapes both declaration incentives and the targeting of tax audits. The Tax Authority can achieve arbitrarily high tax collection rates if the model’s precision is sufficiently high. However, the targeting of audits yields minimal revenues as optimal reliance on the model focuses on enhancing the incentives to declare income in the first place. Prediction power is used to shape incentives rather than to direct audits. At the optimum, the predictions from the statistical model are used to screen larger true income taxpayers, tolerating evasion from taxpayers with lower incomes and high propensity to evade. We corroborate and extend our theoretical findings with numerical simulations calibrated on aggregate moments from administrative audit data. Enhanced model precision reduces tax evasion, particularly among higher incomes, thereby alleviating the inequality in effective tax rates induced by optimal enforcement. While plausible enhancements in model precision yield modest revenue gains, these gains are substantial compared to the audit budget increase required to achieve similar tax revenues without an inference model. |
| Keywords: | Tax evasion; Tax enforcement; Tax audits |
| JEL: | H21 H26 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19213 |
| By: | Michael A Hardy; Alison Lendon; Juan F Redondo Sanchez |
| Abstract: | Disputes between taxpayers and tax administrations are inevitable and should be managed as a core function of tax administration. A well-functioning dispute management system protects government revenue, supports voluntary compliance, and sustains community trust in the legitimacy of the revenue system. This Technical Note and Manual provides a practical framework for managing domestic tax disputes that is fair, timely, and independent manner, grounded in clear legal foundations and supported by sound governance, capable staff, and effective systems. It describes a three-stage formal framework: administrative review, tribunal appeals, and court appeals, and the complementary role of alternative dispute resolution. It also addresses taxpayer rights and obligations, governance, oversight, transparency, staff capability, and performance monitoring. Adaptable to civil-law and common-law systems, it offers worked examples, key performance indicators, and country case studies. |
| Keywords: | tax administration; disputes; objections; tribunals; governance; compliance |
| Date: | 2026–08–18 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imftnm:2026/010 |
| By: | Carmona, Juan; Rosés, Joan R. |
| Abstract: | This paper argues that the financing model of property-rights institutions is a central determinant of their distributional consequences. Following the Napoleonic reforms, Spain’s Liberal governments created a modern, nationally integrated land registry, but financed access through user fees and tied registration to the collection of transfer taxes. This arrangement reduced the administrative cost of reform and gave the Treasury revenue from transactions at a time when the cadastral basis of direct land taxation was increasingly obsolete. Yet it also created a regressive access regime: because notarial fees, registry charges, and taxes were largely fixed, the proportional cost of formalisation was highest for low-value and fragmented properties. Drawing on fee schedules, fiscal series, and provincial evidence, the paper reconstructs this cost structure, documents the growing fiscal weight of transaction taxation, and shows that the incidence of formalisation costs was greatest where registry participation was weakest. Because the exclusion was produced by pricing rather than by incomplete coverage, extending such a registry need not narrow inequality and may reproduce it. Spain’s experience shows that a legally universal propertyrights institution could remain economically unequal in practice, and that the funding model should be treated as a first-order variable in explaining its historical performance. |
| Keywords: | Property rights; Land registration; Fiscal capacity; Formalisation costs; Napoleonic reforms; Land markets; Spain |
| JEL: | N53 N54 K11 Q15 |
| Date: | 2026–08–24 |
| URL: | https://d.repec.org/n?u=RePEc:cte:whrepe:50618 |
| By: | Bayatlioglu, Rifat |
| Abstract: | The paper brings together the findings and policy recommendations of a comparative study examining Türkiye's global standing across three axes: income-distribution inequality, inflation, and the informal/illicit-money economy. The study's central motivation is that these three indicators should not be treated as independent technical issues, but as an integrated problem area that mutually reinforces itself and directly affects consumers' purchasing power, wealth distribution, and trust in the market. |
| Keywords: | informal economy, illicit money, money laundering, income inequality, Gini coefficient, inflation, FATF grey list, Türkiye, consumer protection, tax justice |
| JEL: | E0 |
| Date: | 2026–08–02 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:130348 |