Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments November 7, 2022 erstellt
Description:
In this paper we study formal workers receiving part of their salary off-the-books, which we refer to as "payments under the table''. We conducted a large survey among Brazilian formal workers to understand the extent and mechanics of this type of informality. We find that payments under the table are widespread, sizeable, and proportionally larger for higher income workers. Back of the envelope calculations suggest that payments under the table generate a revenue lost from income tax of around 6.8% of total revenues collected by the income tax. Arrangements involving these payments are typically suggested by the employer, with payments being typically made with cash or virtual payments, and are more widespread in industries with higher shares of informal workers. In addition, we study wage reporting dynamics around the ceiling of employee social security contributions, which can change the incentives for employees to underreport. We find several patterns of earnings reporting that are consistent with employer and employees engaging in payments under the table. Finally, we incorporate novel data on labor lawsuits related to payments under the table to induce variation on the employer's incentives to engage in underreporting