This paper tests the unitary and the collective household labor supply models within a structural framework. A nonlinear unrestricted household labor supply system is postulated and the set of parametric restrictions imposed by each model is derived. The authors' results generally reject the...

Recent theoretical work on labor supply has shown that the tax and transfer system can induce some individuals to work in the irregular labor market. Models designed to represent such behavior are unable to sign unambiguously the impact of the marginal tax rate as well as many key exogenous...

We investigate the impact of working in the underground sector on the demand for underground commodities. Using a tax evasion model with costly information, we show that the presence of a network effect encourages underground workers to purchase underground commodities. The model is estimated...