Tax Rates with Corruption: Labour-market Effects. Empirical Cross-country Comparisons on OECD Countries

Mária Lackó ()

No 604, CERS-IE WORKING PAPERS from Institute of Economics, Centre for Economic and Regional Studies

Abstract: The paper investigates how tax rates, corruption and institutional aspects of the labour market influence the size of the segments of the labour market such as unemployment, employment, self-employment and activity in the hidden economy. The novelty of our approach is the theoretical justification of the interaction between the perception of taxes and of corruption, as well as the establishment of a new concept and variable, the subjective tax rate. Alternative regression calculations are carried out on data for OECD countries for the period 1995 to 2000. The tests confirm the validity of the new variable and the results imply the need for a more sophisticated policy approach for influencing labour market outcomes.

Keywords: Taxation; corruption; labour market; hidden economy (search for similar items in EconPapers)
JEL-codes: D73 E26 H26 J2 (search for similar items in EconPapers)
Date: 2006-05-15, Revised 2006-05-15
New Economics Papers: this item is included in nep-eec, nep-ltv, nep-pbe, nep-pub and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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