European Business Schools Librarian's Group
Working Papers,
Copenhagen Business School, Department of Economics
No 05-2010: Underground Activities and Labour Market Performance
Birthe Larsen () and Ann-Sofie Kolm
Additional contact information
Birthe Larsen: Department of Economics, Copenhagen Business School, Postal: Department of Economics, Copenhagen Business School, Porcelænshaven 16 A, 1, DK-2000 Frederiksberg, Denmark
Ann-Sofie Kolm: Department of Economics, Stockholm University
Abstract: This paper develops a general equilibrium search and matching model where an underground economy co-exists along with the formal part of the economy. In analyzing how tax and punishment policies a¤ect labour market performance, we nd that punishment of infor- mal sector activities induce workers and rms to reallocate towards the formal sector. However, more importantly, we nd that this real- location tends to improve e¢ ciency in search, reduce the overall wage pressure, and reduce actual unemployment.
Keywords: Tax evasion; Underground economy; matching; unemployment
18 pages, May 28, 2010
Full text files
8209Full text
- Copenhagen Business School, Department of Economics
- Ordering Working Papers
- Home page for this series
Questions (including download problems) about the papers in this series should be directed to Lars Nondal ()
Report other problems with accessing this service to Sune Karlsson ().
RePEc:hhs:cbsnow:2010_005This page generated on 2024-12-21 04:36:12.