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Évaluation de l'économie souterraine au Québec. Une approche micro-économétrique

Author

Listed:
  • Bernard Fortin
  • Guy Lacroix
  • Dominique Pinard

Abstract

The main purpose of this paper is to estimate the size and the growth of Quebec?s underground economy, and the corresponding loss of taxes for the government. Our approach is based on a method developed by Pissarides and Weber [1989] and extended by Lyssiotou et al. [2004]. The basic hypothesis is that an individual can under-report his earnings from self-employment but not from paid work, upon which taxes are directly levied. We estimate a consumer demand system where the marginal propensity to consume is allowed to vary with the two types of earnings. We next estimate the size of the self-employment earnings that are under-reported. From this estimate, we calculate a relative size for the underground economy in Quebec. We use the data from Statistics Canada?s Survey of Household Expenditures. According to our results, Quebec?s underground economy amounted to 4.6% of GDP in 1997 and increased to 5.7% in 2002. For the government, this represents as much as $ 3.3 billions in forgone taxes for 2002 alone. Classification JEL : D12, E26, H26.

Suggested Citation

  • Bernard Fortin & Guy Lacroix & Dominique Pinard, 2009. "Évaluation de l'économie souterraine au Québec. Une approche micro-économétrique," Revue économique, Presses de Sciences-Po, vol. 60(5), pages 1257-1274.
    • Handle: RePEc:cai:recosp:reco_605_1257
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    Citations

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    Cited by:

    1. Armagan Tuna Aktuna-Gunes & Christophe Starzec & François Gardes, 2013. "A new estimation of the size of informal economy using monetary and full expenditures in a complete demand system," Post-Print halshs-00841346, HAL.
    2. Armagan Tuna Aktuna Gunes & Christophe Starzec & François Gardes, 2013. "A new estimation of the size of informal economy using monetary and full expenditures in a complete demand system," Documents de travail du Centre d'Economie de la Sorbonne 13053, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    3. Yaroslav Murashov & Tatiana Ratnikova, 2017. "Estimation of the Russian informal economy size on the household budget survey data," Cogent Economics & Finance, Taylor & Francis Journals, vol. 5(1), pages 1307642-130, January.

    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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