A bivariate random effect panel data model is estimated for labor supply in the taxable and the nontaxable sectors in Denmark. The results show that wage rates and non-labor income have significant effects on labor supply in both sectors. For men, income taxes seem to twist the labor supply away...

This paper investigates the effect of working in the underground sector on the level of individual underground expenditures. We show that it can be decomposed into a network effect, a non-separability effect and an income effect. Our empirical analysis uses micro data from a randomized survey...

In the simple Allingham-Sandmo portfolio model of tax evasion an expected utility maximizer will cheat more than what is estimated in empirical studies. Two main types of explanation have been suggested as solutions to this puzzle: (1) Tax payers act according to some non-expected utility...

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...

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...

In the simple Allingham-Sandmo portfolio model of tax evasion an expected utility maximizer will cheat more than what is estimated in empirical studies. Two main types of explanation have been suggested as solutions to this puzzle: (1) Tax payers act according to some non-expected utility...

In the simple Allingham-Sandmo portfolio model of tax evasion an expected utility maximizer will cheat more than what is estimated in empirical studies. Two main types of explanation have been suggested as solutions to this puzzle: (1) Tax payers act according to some non-expected utility...

This paper studies the Marginal Cost of Funds (MCF) in the existence of tax evasion. When tax evasion is incorporated as a behavioral response to tax rate change, the MCF can be different than the previously estimated ones in the literature. We develop a general equilibrium model of tax evasion,...

In the simple Allingham-Sandmo portfolio model of tax evasion an expected utility maximizer will cheat more than what is estimated in empirical studies. Two main types of explanation have been suggested as solutions to this puzzle: (1) Tax payers act according to some non-expected utility...

We estimate a double hurdle (DH) model of the Hungarian wage distribution assuming censoring at the minimum wage and wage under-reporting (i.e. compensation consisting of the minimum wage, subject to taxation, and an unreported cash supplement). We estimate the probability of under-reporting for...