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Estimate of the Underground Economy in Poland Based on Household Expenditures and Incomes

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  • Mehmet Burak Turgut

    (Department of Macroeconomics and International Trade Theory, Faculty of Economic Sciences, University of Warsaw, Poland)

  • Tomasz Tratkiewicz

    (Faculty of Economics and Sociology, University of Łódź, Poland
    CASE - Center for Social and Economic Research)

Abstract

We estimate the size of income underreporting in Poland by following and extending the consumption method of Pissarides and Weber (1989). Our study shows that underreporting of income occurs among households with income from self-employment. We do not find any significant underreporting activity by the employees working in the private sector. The main findings indicate that roughly one-fourth of the total income of self-employed households is not reported in Poland. This share varies between 20 to 30 percent from 2005 to 2017 with a decreasing trend.

Suggested Citation

  • Mehmet Burak Turgut & Tomasz Tratkiewicz, 2023. "Estimate of the Underground Economy in Poland Based on Household Expenditures and Incomes," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 15(1), pages 1-29, March.
    • Handle: RePEc:psc:journl:v:15:y:2023:i:1:p:1-29
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    More about this item

    Keywords

    underground economy; underreporting of income; income elasticity; food consumption; self-employed households;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • 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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