Tax evasion and self-employment in a high-tax country: evidence from Sweden
By Per Engström, B. Holmlund. Social Science Research Network, 2009
222 citations recorded by the source corpus.
Self-employed individuals have arguably greater opportunities than wage earners to underreport their incomes. This article uses recent Swedish income and expenditure data to examine the extent of underreporting of income among self-employed individuals. A key hypothesis is that underreporting of incomes among the self-employed would be visible in the data as ‘excess food consumption’, for a given level of observed income. Our results confirm the underreporting hypothesis. In particular, we estimate that households with at least one self-employed member underreport their total incomes by around 30%. Under-reporting appears to be much more prevalent among self-employed people with unincorporated businesses as among those with incorporated businesses.
Subfields: Accounting, Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/cd9250fc9d315bcf6a63722d40861f3e4764215d
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Citations in the corpus
- Public policy to promote entrepreneurship: a call to arms (2016, unknown): “…firms are likely to underreport their income substantially less than small sole proprietorships arguably due to the more detailed scrutiny of accounts in corporations (Engström and Holmlund 2009; Schuetze 2002), suggesting that tighter financial auditing of entrepreneurs may in fact be motivated.”
- The entrepreneurial earnings puzzle: Mismeasurement or real? (2014, background): “8 Engström and Holmlund (2009) further find that sole proprietors underreport more than those running incorporated businesses, and Schuetze (2002) reports that underreporting varies by occupation, age, and the number of household members who are self-employed.”
- Entrepreneurship and public policy (2009, unknown): “80 Ho and Wong (2007), and Keuschnigg and Nielsen (2004a). 81 See, e.g., Bottazzi and Da Rin (2002) and Da Rin et al.”