Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/126467
Authors: 
Paulus, Alari
Year of Publication: 
2015
Series/Report no.: 
ISER Working Paper Series 2015-15
Abstract: 
We estimate the extent of income underreporting among working households, using data from an income survey linked with individual tax records for Estonia. Income underreporting is inferred from consumption propensities, following and extending the method by Pissarides andWeber (1989). Our dataset allows us to assess the validity of the key assumption in related studies that survey income corresponds to income reported to the tax authority. Our results show large underreporting of earnings by the self-employed and also substantial underreporting of earnings by private sector employees on the basis of register income, while a much smaller scale of non-compliance is detected for self-employed and no underreporting for private employees using survey incomes. This suggests that previous studies applying this methodology to survey data have underestimated the extent of non-compliance.
Subjects: 
tax compliance
tax reports
income survey
expenditure
Estonia
JEL: 
H26
H31
Document Type: 
Working Paper

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