Tax Evasion and the Contribution-Benefit Link

• Tác giả: Anikó Bíró
• Ngôn ngữ: eng
• Ký hiệu phân loại: 336.20 Public finance
• Thông tin xuất bản: Washington, DC: World Bank, 2024
• Bộ sưu tập: Tài liệu truy cập mở
• ID: 323949
• Chủ đề: 1. CONTRIBUTION-BENEFIT LINK; 2. PARENTAL BENEFITS; 3. SOCIAL SECURITY; 4. TAX EVASION

Tóm tắt

This paper studies tax evasion and the contribution-benefit link in the context of maternity benefits in Hungary. Earnings and employment patterns suggest pre-pregnancy underreporting, followed by formalization of some earnings and employment during pregnancy to increase benefits. Reported earnings in small, domestic, and less productive firms bunch at the minimum wage before pregnancy and the benefit-maximizing threshold during pregnancy. Using a policy reform, the paper shows that the size of the reporting response tracks changing reporting incentives. Increases in pre-childbirth reported earnings are partially sticky after maternity leave. The results indicate that linking benefits to contributions can reduce tax evasion and improve formalization.