Wages, Unemployment, and the Underground Economy

Arbeitspapier

While examining the macroeconomic effects of increased government control of the informal sector, this paper develops a two-sector general equilibrium model featuring matching frictions and worker-firm wage bargaining. Workers search for jobs in both the formal and the informal sector. We analyse the impact of higher punishment rates and a higher audit rate on labour market performance. We find that a higher punishment rate reduces the size of the informal sector and reduces unemployment. A higher audit rate has an ambiguous impact on unemployment, and may actually increase the size of the underground economy.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CESifo Working Paper ; No. 1086

Klassifikation und Themen

• Klassifikation: Wirtschaft
• Thema: tax evasion ; underground economy ; matching ; bargaining ; unemployment

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Kolm, Ann-Sofie ; Larsen, Birthe
• Ereignis: Veröffentlichung
• (wer): Center for Economic Studies and ifo Institute (CESifo)
• (wo): Munich
• (wann): 2003

Weitere Informationen

• Handle: http://hdl.handle.net/10419/76501
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ