This paper sheds light on the role of public institutions as a way to reduce tax evasion through a close link between payroll taxation and pension benefits. We use a political economy model in which agents have the possibility to hide part of their earnings in order to avoid taxation. Taxation...

Phelpsís (1961) Golden Rule states an unambiguous relationship between optimal capital intensity and fertility: a rise in fertility decreases the optimal capital intensity, because a higher fertility increases the investment required to sustain a given capital to labour ratio (i.e., the capital...