Quotation Stiassny, Alfred, Walther, Herbert. 2009. International Comparsions of Household Saving Rates and Hidden Income. Shadow Economy, Tax Evasion & Sozial Norms, Münster, Deutschland, 23.7. - 26.7. 2009.


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Abstract

In this paper, it is argued that shadow activities and different levels of marketization of household production systematically distort international comparisons of aggregate gross household saving rates (HSR): Higher shares of hidden income increase observed HSR. Cross-sectional data for eighteen(twenty-four) countries covering a period of a decade show that gross HSR are positively related to the degree of corruption (used as a proxy of the propensity to shift economic activities into the shadow) and to the share of income from property and self-employment. They are negatively related to the female employment rate, the ratio of indirect taxes to direct taxes and to the tax wedge. A plausible story behind these phenomena might be that unobserved consumption and ‘wages’ in the black labor market induce an upward bias of observed HSR and profit shares, while the price level effects of a higher share of indirect taxes and a ‘welfare state’ effect lower observed HSR. As expected, the female employment rate (used as an indicator of marketization) is negatively related to household saving rates.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Paper presented at an academic conference or symposium
Language English
Title International Comparsions of Household Saving Rates and Hidden Income
Event Shadow Economy, Tax Evasion & Sozial Norms
Year 2009
Date 23.7. - 26.7. 2009
Country Germany
Location Münster

Associations

People
Stiassny, Alfred (Details)
Walther, Herbert (Details)
Organization
Institute for Quantitative Economics IN (Details)
Institute for Labor Economics IN (Details)
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