Rapidly aging population in high-income countries has exerted additional pressure on the sustainability of public pension expenditure. We present a formal model of public pension expenditure under endogenous human capital, where the latter facilitates a substantial decrease in equilibrium...

Bajada (2006) recognises that his earlier books and papers used a faulty method for measuring the underground economy in Australia. He also reports finding a new “more serious problem” in the method. All of these failures can be avoided, it is claimed, by reduced use of currency modelling...

The rapid growth of substitutes for cash, particularly debit and credit cards, has led economists to predict the advent of the “cashless society”. Yet cash holdings in most developed economies continue to grow and in the U.S., per capita currency holdings now amount to $3000. This paper...

This study empirically investigates the determinants of aggregate federal personal income tax evasion in the U.S. using the most current IRS data available. In 2010, the IRS released a new series on personal income tax evasion data running through the year 2005. Using this new data, the present...

A real, almost palpable, connection exists between the official and the underground economy. More than that, both sides of the economy (official and underground) are connected with the competitiveness of a country. Strangely a large presence of undereground in the economy is a sign of...

The actual economic crisis has a major impact on the underground economy because of tax burden increase especially. This study realizes an analysis of the major implications of the economic crises on the size and the consequences of the underground activities. Also we try to reveal the...

In this endeavor an attempt has been made to investigate the major causes and factors of influence of the underground economy. Our analysis is based on the study of tax payer behavior and taxation system pattern. The paper examines how social institutions and government policies affect...

Abstract This study empirically investigates the extent of noncompliance with the tax code and examines the determinants of federal income tax evasion in the U.S. Employing a refined version of Feige’s (1986; 1989) General Currency Ratio (GCR) model to estimate a time series of unreported income...

New Estimates of U.S. Currency Abroad, the Domestic Money Supply and the Unreported Economy Edgar L. Feige * Abstract Despite financial innovations that have created important new substitutes for cash usage, per capita holdings of U.S. currency amount to $2950. Yet American households and...

In the presence of the underground economy taxes give rise to a deadweight loss from displacement of efficient producers by inefficient producers. We consider an economy in which a producer faces two types of costs: the cost of production, and taxes. If the ability to evade taxes is inversely...