Underground activities and labour market performance

Birthe Larsen

Copenhagen Business School

Onsdag 28.februar kl 13.15 - 14.00, rom T452:

Forskningsseminar ved Birthe Larsen, Associate Professor ved Copenhagen Business School. "Birthe Larsen holds a master of economics from London School of Economics and did her PhD. at the University of Copenhagen. She has spent longer research periods at IIES, Stockholm, Melbourne University, Australia and Insead in France. Her main research focuses on unemployment in search and matching models, including projects concerning the informal sector, education, discrimination and minimum wages. Recent research projects include also trade issues and empirical work."  

Larsen presenterer paperet Underground activities and labour market performance, som er eit felles arbeid med Ann-Sofie Kolm ved Stockholms Universitet. 

We build a general equilibrium model in terms of a search and matching model with an informal sector. We consider the impact of the traditional policy instruments considered in the tax evasion literature, such as changes in the tax- and punishment system as well as changes in the employment protection legislation and concealment costs, on labour market outcomes. To this end, we set-up a model which allow workers to allocate their search for formal and informal sector jobs optimally. We calibrate and simulate the model to fit the North and the South of Europe, where the share of informal sector workers is equal to three percent in the North and more than 4 times as high in the South. We consider the impact of concealment costs, as there are large differences in terms of tax administration procedures between the South and the North, in terms of that Northern countries make more extensively use of third-party reporting. We also examine whether stricter employment protection legislation in Southern Europe may explain the observed fact.

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Published 11. januar 2018 - 13:45 - Updated 7. February 2018 - 10:11