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Does Tax Evasion Affect Occupational Choice?*
Author(s) -
Parker Simon C.
Publication year - 2003
Publication title -
oxford bulletin of economics and statistics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.131
H-Index - 73
eISSN - 1468-0084
pISSN - 0305-9049
DOI - 10.1111/1468-0084.t01-1-00050
Subject(s) - tax evasion , evasion (ethics) , affect (linguistics) , economics , replication (statistics) , public economics , econometric analysis , microeconomics , econometrics , psychology , mathematics , statistics , immune system , communication , immunology , biology
This paper presents a novel micro‐econometric procedure that identifies the extent to which occupational choices are distorted by opportunities for tax evasion. Previous studies claim to have found significant and substantial effects, but analysis and replication of their methods reveals that they generate conflicting and misleading results. The paper then implements the new procedure using several British micro‐data sets. A thorough empirical investigation reveals that occupational choice between self‐employment and paid employment is not robustly related to pecuniary factors in general, and is invariant to tax avoidance and evasion opportunities in particular.