Workers' Tax Evasion in Italy

Econpubblica Working Paper No. 104

31 Pages Posted: 21 Apr 2005

See all articles by Carlo V. Fiorio

Carlo V. Fiorio

University of Milan - Department of Economics, Management and Quantitative Methods (DEMM)

Francesco D’Amuri

Bank of Italy

Date Written: April 2005

Abstract

We apply a direct method to estimate tax evasion in Italy assuming that ax evaders might consider declaring a closer-to-true income in an anonymous interview. The methodology is applied to employed and self-employed tax-payers, combining the Survey of Household Income (SHIW) by the Bank of Italy and a large random sample of tax forms by SeCIT, both referred to incomes received in 2000. Posing particular attention to the post-stratification of the data, we find that tax evasion is consistently higher for self-employment income than for employment income: the difference ranges from about 7% in lower deciles to 27% around the mode. This analysis shows that a relevant level of tax evasion arises also at low levels of employment income, although some under-sampling problems need to be considered. A description of tax evaders is attempted using standard OLS and quantile regression methods and an evaluation of the redistribution and incidence effects of tax evasion among workers is provided.

Keywords: tax, evasion

JEL Classification: H26

Suggested Citation

Fiorio, Carlo V. and D’Amuri, Francesco, Workers' Tax Evasion in Italy (April 2005). Econpubblica Working Paper No. 104, Available at SSRN: https://ssrn.com/abstract=702922 or http://dx.doi.org/10.2139/ssrn.702922

Carlo V. Fiorio (Contact Author)

University of Milan - Department of Economics, Management and Quantitative Methods (DEMM) ( email )

Via Conservatorio, 7
Milan, 20122
Italy

Francesco D’Amuri

Bank of Italy ( email )

Via Nazionale 91
00184 Roma
Italy

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