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on Informal and Underground Economics |
| By: | Forestra, Alessandra (Southampton University); Megalokonomou, Rigissa (Monash University); Vlassopoulos, Michael (Southampton University) |
| Abstract: | This paper investigates whether crisis narratives affect how the judiciary handles tax evasion. We study this question in the context of the Greek debt crisis, in which tax evasion was publicly blamed for the fiscal collapse, and judges themselves experienced substantial salary cuts as part of the resulting austerity programme. Using a novel dataset compiled from Greek Supreme Court rulings between 2006 and 2014, we compare tax evasion appeals with appeals in other serious crimes not directly related to the fiscal crisis, such as homicide and rape, in a difference-in-differences framework. We find that the probability that the Supreme Court rejects tax-evasion appeals increases by about 25 percentage points relative to these control offences after January 2010—about a 43% increase relative to the pre-crisis baseline. Effects are larger in months with greater public attention to tax evasion, as measured by Google Trends, suggesting a role for salience. Our findings suggest that crisis narratives, par- ticularly when coupled with personal economic shocks to judges, can influence the judicial treatment of tax offences. |
| Keywords: | economic narratives, judicial decision-making, tax evasion, financial crisis, legal institutions, difference- in-differences |
| JEL: | D91 P16 K40 K42 H26 Z13 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18489 |
| By: | El-Haddad, Amirah (German Institute of Development and Sustainability (IDOS)); Krafft, Caroline (University of Minnesota); Selwaness, Irene (Faculty of Economics and Political Science, Cairo University); Assaad, Ragui (University of Minnesota) |
| Abstract: | This paper investigates the determinants and dynamics of labour demand and specifically informal labour in Egypt’s manufacturing sector, using nationally representative firm-level data. We analyse the determinants of total employment, the share of informal labour, and its average annual change over the firm life cycle. Three key findings emerge. First, employment is positively associated with capital, exporting, innovation, industrial zones, worker training, and managerial education, and negatively associated with sole proprietorships, wages, and total factor productivity. Second, informal employment is more common among private sector firms, sole proprietorships, and firms using more part-time workers, and less prevalent among firms adopting technology or led by more educated managers. Third, although most formal firms exhibit no change in the share of informal workers, formal firms that did not initially employ informal labour tend to increase their informal share, while firms that formalised continue to rely heavily on informal employment. Together, these findings underscore the persistence of informality and limited transitions toward full formalisation within Egypt’s formal manufacturing sector. |
| Keywords: | Manufacturing, labour demand, informality, Egypt |
| JEL: | J23 L6 L11 O17 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18500 |