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Offre de travail au noir en présence de la fiscalité et des contrôles fiscaux

Bernard Fortin (), Nadia Joubert and Guy Lacroix ()

Economie & Prévision, 2004, vol. n° 164-165, issue 3, 145-163

Abstract: This paper presents an econometric model of labour supply on official and underground markets in the presence of taxes and fraud prevention policies. We specify a quadratic utility function in order to impose a minimum of restrictions on individuals’ preferences. The parameters of this utility function are estimated using the full-information maximum likelihood method. Our approach accounts for the endogenous nature of the probability of detection and penalties. This eliminates the potential bias introduced by cognitive dissonance associated with subjective variables. Wemade the estimates using individual Canadian data. Our findings confirm the influence of tax levels and tax enforcement and reject the hypotheses of additive separability of the utility function and perfect substitution of hours worked in the official and underground economies.

Keywords: underground economy; taxation; social transfers; decisions under uncertainty; full information maximum likelihood (search for similar items in EconPapers)
Date: 2004
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