Arbeitspapier

Ethnic Divisions and the Size of the Informal Sector

This paper investigates the relationship between ethnic fragmentation and the size of the informal economy. Recent experimental and empirical research links, in turn, ethnicity and trust, and trust and tax compliance. In addition, recent empirical studies have identified an unwillingness to contribute to public goods benefiting other ethnic groups. Combining these insights, we argue that increasing ethnic fractionalization decreases voluntary tax compliance, and present empirical evidence at the macro level in a cross-section of more than fifty countries, that more ethnically fragmented societies have significantly larger informal sectors.

Language
Englisch

Bibliographic citation
Series: EPRU Working Paper Series ; No. 2003-01

Classification
Wirtschaft
Tax Evasion and Avoidance
Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
Subject
informal sector
ethnic fragmentation
voluntary tax compliance
Informeller Sektor
Ethnische Gruppe
Steuermoral
Welt

Event
Geistige Schöpfung
(who)
Dreyer Lassen, David
Event
Veröffentlichung
(who)
University of Copenhagen, Economic Policy Research Unit (EPRU)
(where)
Copenhagen
(when)
2003

Handle
Last update
10.03.2025, 11:41 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Dreyer Lassen, David
  • University of Copenhagen, Economic Policy Research Unit (EPRU)

Time of origin

  • 2003

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