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Income hiding and informal redistribution: A lab-in-the-field experiment in Senegal

Marie Boltz, Karine Marazyan and Paola Villar

Journal of Development Economics, 2019, vol. 137, issue C, 78-92

Abstract: We estimate the hidden cost of social obligations to redistribute exploiting data from a controlled setting in urban Senegal, which combines lab-in-the-field measures and out-of-lab follow-up data. We estimate a social tax of about 9 percent. When given the opportunity to get hidden income, individuals decrease by 26 percent the share of gains they transfer to kin — mostly outside the household — and increase health and personal expenses. We expand on prior literature by both identifying the individual cost of informal redistribution and then relating it to postexperiment resource-allocation decisions, and by disentangling intra- and interhousehold redistributive pressure.

Keywords: Income observability; Informal redistribution; Extended families; Resource allocation decisions; Lab-in-the-field experiment; Africa (search for similar items in EconPapers)
JEL-codes: C91 C93 D13 O12 O15 O17 (search for similar items in EconPapers)
Date: 2019
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Working Paper: Income Hiding and Informal Redistribution: A Lab-in-the-Field Experiment in Senegal (2017) Downloads
Working Paper: Income Hiding and Informal Redistribution: A Lab in the Field Experiment in Senegal (2016) Downloads
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