Self-Employment Income Gap in Great Britain: How Much and Who?

Ana Cinta G Cabral, Christos Kotsogiannis and Gareth Myles ()

CESifo Economic Studies, 2019, vol. 65, issue 1, 84-107

Abstract: This article utilizes an expenditure survey-based data set that is rich in terms of observable characteristics to estimate the ‘income gap’ (defined to be one minus the proportion of reported to true income) of the self-employed in Great Britain. It also estimates the evasion response of the individual characteristics of the self-employed. It emerges that self-employed report, on average, around 80.4% of their income to the tax authority, which translates into an income-gap of 19.6% which varies significantly by sex, age, and region. In particular, male self-employed taxpayers under-report more than female ones, and they, in general, become more compliant as they age. Particular emphasis is paid to verifying that the income gap observed cannot be explained by other reasons than under-reporting. (JEL codes: H26, O17, D12, E26)

Keywords: income-gap; tax compliance; tax evasion; shadow economy; self-employed (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://hdl.handle.net/10.1093/cesifo/ify015 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:cesifo:v:65:y:2019:i:1:p:84-107.

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

CESifo Economic Studies is currently edited by Panu Poutvaara

More articles in CESifo Economic Studies from CESifo Group Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().