Wages, Unemployment, and the Underground Economy
Copyright policy )Wages, Unemployment, and the Underground Economy
While examining the macroeconomic effects of increased governmentcontrol of the informal sector, this paper develops a two-sectorgeneral equilibrium model featuring matching frictions and worker-firm wage bargaining. Workers search for jobs in both the formaland the informal sector. We analyse the impact of higher punishmentrates and a higher audit rate on labour market performance. We findthat a higher punishment rate reduces the size of the informal sectorand reduces unemployment. A higher audit rate has an ambiguousimpact on unemployment, and may actually increase the size of theunderground economy.JEL-codes: H26Keywords: Tax evasion, underground economy, matching, bargaining,unemployment.
- Uppsala University Sweden
- Copenhagen Business School Denmark
Sort økonomi, unemployment, sort arbejde, Schattenwirtschaft, tax evasion, H26, Lønteori, Tax evasion, Tax evasion; underground economy; matching; bargaining; unemployment, Sort arbejde, sort økonomi, Mehr-Sektoren-Modell, skatteomgåelse, Arbeitsangebot, ddc:330, underground economy, matching, Kontrolle, bargaining, Allgemeines Gleichgewicht, tax evasion, underground economy, matching, bargaining, unemployment, Arbejdsløshed, arbejdsløshed, lønteori, Løn, Theorie, jel: jel:H26
Sort økonomi, unemployment, sort arbejde, Schattenwirtschaft, tax evasion, H26, Lønteori, Tax evasion, Tax evasion; underground economy; matching; bargaining; unemployment, Sort arbejde, sort økonomi, Mehr-Sektoren-Modell, skatteomgåelse, Arbeitsangebot, ddc:330, underground economy, matching, Kontrolle, bargaining, Allgemeines Gleichgewicht, tax evasion, underground economy, matching, bargaining, unemployment, Arbejdsløshed, arbejdsløshed, lønteori, Løn, Theorie, jel: jel:H26
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