In this paper the theory of rank-dependent expected utility (RDEU) is substituted for the theory of expected utility (EU) in a model of optimal provision of public goods. The substitution generalizes the Samuelson rule, previously modified to include deadweight loss and tax evasion loss.

Unreported labour by one worker in a firm increases the probability of detection for his fellow workers, not only for himself. The firm takes this external effect into account. As a consequence, unreported work becomes rationed by the firms demand, rather than determined by demand equal supply....

The main purpose of this study is to measure the level of the shadow economy in Norway following the demand for currency approach. The question analysed is how well does this approach capture the level of shadow economy in front of a decreasing level of currency in circulation and an increasing...

Labour supply when tax evasion is an option is analysed within a discrete choice framework which incorporates random parameters and Box-Cox functional forms, using mixed logit models. Deviates in parameters and, in some cases, correlation between alternatives in the evasion group are found to be...

We estimate labor supply when tax evasion is an option, using a discrete choice model on pooled Norwegian survey data from 1980 and 2001. Direct labor supply elasticities, conditional on sectors, are in the range of 0.2-0.4. The elasticities are higher for work that is not registered for...

A Box-Cox structural utility model is estimated on tax evasion survey data and it is shown that this model gives a better representation of individual utility maximizing behavior than a flexible model, represented by a polynomial of degree 3. It is found that an overall wage increase has a...

In this paper we analyse how fairness considerations, in particular considerations of just income distribution, affect whether or not people believe tax evasion can be justified and their willingness to engage in tax evasion. Using data from the Norwegian “Hidden Labour Market Survey” we...

There is a growing interest in morale as a potential substitute for sanctions, encouraged by exerimental evidence that people's morale affect their economic decisions. I show that while morale may be a substitute for sanctions for each citizen, it is not a substitute in the market. In a model...

Why do not people evade more taxes when their gain from evasion is higher than the expected penalties? Why does only a small minority evade when a large majority is willing to? These tax evasion puzzles are explained in a labour market framework where employees may combine reported work in firms...

This paper exploits a Norwegian physician directed reform aimed to reduce sick-leave. Physicians were required to consider part-time sick-leave as the default treatment and – in the case of long lasting full-time sick-leave – to file a report documenting why the worker was unable to perform...