نهادهای بازار کار، مالیات و اقتصاد زیرزمینی

The paper aims at qualifying the links between labor market institutions, taxation, tax monitoring, and underground economic activity. The proposed model is a continuous time matching model with one commodity roduced either overground or underground. Underground economic activity arises because of partial compliance with regulations and tax contributions imposed by the government. Vacancies and workers search are directed at a specific labor market. Workers are heterogenous in the subjective cost they face when operating in the irregular sector. Analytical and numerical investigations suggest that interactions between regular and irregular activities can affect standard results of policy interventions. In that respect, the paper supports the view that policies aiming at increasing individuals benefits of participating in the regular sector are more desirable than a deterrence policy.

Underground economic activity is a feature shared by all OECD countries.1 However, the debate about accurate estimation procedures and definitions is still quite open.2 The underground sector can include both legal and illegal, and both paid and unpaid activities.3 In this paper, the underground sector is assumed to cover only legal production. In addition, tax evasion and non-compliance with economic legislation are assumed to be the main primary activities involved in it.4 Henceforth, the underground sector is called the informal or irregular sector interchangeably.

Analytical investigations and numerical solutions of the model developed in the paper corroborate three major arguments. First, the existence of an underground sector in the economy is likely to affect the impact of policy intervention. Second, some policies aiming at increasing incentives to operate in the regular sector, specially a rise in unemployment benefits, can prove to be more effective in the fight against irregular activities than policies based on tighter deterrence. The third argument is a consequence of the previous two. Namely, an integrated view of the labor market would permit policy makers to deal with various policy issues avoiding the possible risk of using instruments with contrasting effects.