Detecting envelope wages with e-billing information

Andrea Lopez-Luzuriaga; Monica Calijuri; Carola Pessino; Simeon Schächtele; Ubaldo Gonzalez; Carla Chamorro

doi:10.1007/s10797-023-09811-y

Detecting envelope wages with e-billing information

Andrea Lopez-Luzuriaga, Monica Calijuri, Carola Pessino, Simeon Schächtele, Ubaldo Gonzalez, Carla Chamorro

Faculty of Economics

Research output: Contribution to journal › Article › peer-review

Abstract

We use information from the electronic billing system to estimate the underreporting of income of private sector employees. We follow an expenditure-based methodology using the consumption of public and private sector employees for similar levels of reported income. We find that private sector employees underreport between 7 and 9% of their income in Ecuador. The size of the underreporting gap is negatively correlated with the number of employees at the firm, consistent with different risks and administrative costs of ‘envelope wages’ in small versus large firms.

Original language	English (US)
Journal	International Tax and Public Finance
DOIs	https://doi.org/10.1007/s10797-023-09811-y
State	Accepted/In press - 2023

All Science Journal Classification (ASJC) codes

Accounting
Finance
Economics and Econometrics

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10.1007/s10797-023-09811-y

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AU - Lopez-Luzuriaga, Andrea

AU - Calijuri, Monica

AU - Pessino, Carola

AU - Schächtele, Simeon

AU - Gonzalez, Ubaldo

AU - Chamorro, Carla

PY - 2023

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AB - We use information from the electronic billing system to estimate the underreporting of income of private sector employees. We follow an expenditure-based methodology using the consumption of public and private sector employees for similar levels of reported income. We find that private sector employees underreport between 7 and 9% of their income in Ecuador. The size of the underreporting gap is negatively correlated with the number of employees at the firm, consistent with different risks and administrative costs of ‘envelope wages’ in small versus large firms.

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JO - International Tax and Public Finance

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ER -

Detecting envelope wages with e-billing information

Abstract

All Science Journal Classification (ASJC) codes

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