Work and tax evasion incentive effects of social insurance programs : Evidence from an employment-based benefit extension

Autores
Bérgolo Sosa, Marcelo; Cruces, Guillermo
Año de publicación
2014
Idioma
español castellano
Tipo de recurso
documento de trabajo
Estado
versión enviada
Descripción
This article studies how social insurance programs shape individual’s incentives to take up registered employment and to report earnings to the tax authorities. The analysis is based on a social insurance reform in Uruguay that extended healthcare coverage to the dependent children of registered private-sector workers. The identification strategy relies on a comparison between individuals with and without dependent children before and after the reform. The reform increased benefit-eligible registered employment by 1.6 percentage points (about 5 percent above the prereform level), mainly due to an increase in labor force participation rather than to movement from unregistered to registered employment. The shift was greater for parents with younger children and for cohabiting adults whose partners’ jobs did not provide the couples’ children with access to the benefit. Finally, the reform increased the incidence of underreporting of salaried earnings by about 4 percentage points (25 percent higher than the pre-reform level), mostly for workers employed at small firms. The increase in fiscal revenue from higher levels of registered employment was several orders of magnitude greater than the loss of revenue due to an increase in underreporting.
Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS)
Materia
Ciencias Económicas
labor supply
work incentives
social insurance
tax evasion
impuesto
JEL: J22, H26, O17
empleo
Nivel de accesibilidad
acceso abierto
Condiciones de uso
http://creativecommons.org/licenses/by/4.0/
Repositorio
SEDICI (UNLP)
Institución
Universidad Nacional de La Plata
OAI Identificador
oai:sedici.unlp.edu.ar:10915/49628

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spelling Work and tax evasion incentive effects of social insurance programs : Evidence from an employment-based benefit extensionBérgolo Sosa, MarceloCruces, GuillermoCiencias Económicaslabor supplywork incentivessocial insurancetax evasionimpuestoJEL: J22, H26, O17empleoThis article studies how social insurance programs shape individual’s incentives to take up registered employment and to report earnings to the tax authorities. The analysis is based on a social insurance reform in Uruguay that extended healthcare coverage to the dependent children of registered private-sector workers. The identification strategy relies on a comparison between individuals with and without dependent children before and after the reform. The reform increased benefit-eligible registered employment by 1.6 percentage points (about 5 percent above the prereform level), mainly due to an increase in labor force participation rather than to movement from unregistered to registered employment. The shift was greater for parents with younger children and for cohabiting adults whose partners’ jobs did not provide the couples’ children with access to the benefit. Finally, the reform increased the incidence of underreporting of salaried earnings by about 4 percentage points (25 percent higher than the pre-reform level), mostly for workers employed at small firms. The increase in fiscal revenue from higher levels of registered employment was several orders of magnitude greater than the loss of revenue due to an increase in underreporting.Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS)2014-05info:eu-repo/semantics/workingPaperinfo:eu-repo/semantics/submittedVersionDocumento de trabajohttp://purl.org/coar/resource_type/c_8042info:ar-repo/semantics/documentoDeTrabajoapplication/pdfhttp://sedici.unlp.edu.ar/handle/10915/49628spainfo:eu-repo/semantics/altIdentifier/url/http://cedlas.econo.unlp.edu.ar/download.php?file=archivos_upload/doc_cedlas161.pdfinfo:eu-repo/semantics/altIdentifier/issn/1853-0168info:eu-repo/semantics/openAccesshttp://creativecommons.org/licenses/by/4.0/Creative Commons Attribution 4.0 International (CC BY 4.0)reponame:SEDICI (UNLP)instname:Universidad Nacional de La Platainstacron:UNLP2025-09-29T11:03:42Zoai:sedici.unlp.edu.ar:10915/49628Institucionalhttp://sedici.unlp.edu.ar/Universidad públicaNo correspondehttp://sedici.unlp.edu.ar/oai/snrdalira@sedici.unlp.edu.arArgentinaNo correspondeNo correspondeNo correspondeopendoar:13292025-09-29 11:03:42.639SEDICI (UNLP) - Universidad Nacional de La Platafalse
dc.title.none.fl_str_mv Work and tax evasion incentive effects of social insurance programs : Evidence from an employment-based benefit extension
title Work and tax evasion incentive effects of social insurance programs : Evidence from an employment-based benefit extension
spellingShingle Work and tax evasion incentive effects of social insurance programs : Evidence from an employment-based benefit extension
Bérgolo Sosa, Marcelo
Ciencias Económicas
labor supply
work incentives
social insurance
tax evasion
impuesto
JEL: J22, H26, O17
empleo
title_short Work and tax evasion incentive effects of social insurance programs : Evidence from an employment-based benefit extension
title_full Work and tax evasion incentive effects of social insurance programs : Evidence from an employment-based benefit extension
title_fullStr Work and tax evasion incentive effects of social insurance programs : Evidence from an employment-based benefit extension
title_full_unstemmed Work and tax evasion incentive effects of social insurance programs : Evidence from an employment-based benefit extension
title_sort Work and tax evasion incentive effects of social insurance programs : Evidence from an employment-based benefit extension
dc.creator.none.fl_str_mv Bérgolo Sosa, Marcelo
Cruces, Guillermo
author Bérgolo Sosa, Marcelo
author_facet Bérgolo Sosa, Marcelo
Cruces, Guillermo
author_role author
author2 Cruces, Guillermo
author2_role author
dc.subject.none.fl_str_mv Ciencias Económicas
labor supply
work incentives
social insurance
tax evasion
impuesto
JEL: J22, H26, O17
empleo
topic Ciencias Económicas
labor supply
work incentives
social insurance
tax evasion
impuesto
JEL: J22, H26, O17
empleo
dc.description.none.fl_txt_mv This article studies how social insurance programs shape individual’s incentives to take up registered employment and to report earnings to the tax authorities. The analysis is based on a social insurance reform in Uruguay that extended healthcare coverage to the dependent children of registered private-sector workers. The identification strategy relies on a comparison between individuals with and without dependent children before and after the reform. The reform increased benefit-eligible registered employment by 1.6 percentage points (about 5 percent above the prereform level), mainly due to an increase in labor force participation rather than to movement from unregistered to registered employment. The shift was greater for parents with younger children and for cohabiting adults whose partners’ jobs did not provide the couples’ children with access to the benefit. Finally, the reform increased the incidence of underreporting of salaried earnings by about 4 percentage points (25 percent higher than the pre-reform level), mostly for workers employed at small firms. The increase in fiscal revenue from higher levels of registered employment was several orders of magnitude greater than the loss of revenue due to an increase in underreporting.
Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS)
description This article studies how social insurance programs shape individual’s incentives to take up registered employment and to report earnings to the tax authorities. The analysis is based on a social insurance reform in Uruguay that extended healthcare coverage to the dependent children of registered private-sector workers. The identification strategy relies on a comparison between individuals with and without dependent children before and after the reform. The reform increased benefit-eligible registered employment by 1.6 percentage points (about 5 percent above the prereform level), mainly due to an increase in labor force participation rather than to movement from unregistered to registered employment. The shift was greater for parents with younger children and for cohabiting adults whose partners’ jobs did not provide the couples’ children with access to the benefit. Finally, the reform increased the incidence of underreporting of salaried earnings by about 4 percentage points (25 percent higher than the pre-reform level), mostly for workers employed at small firms. The increase in fiscal revenue from higher levels of registered employment was several orders of magnitude greater than the loss of revenue due to an increase in underreporting.
publishDate 2014
dc.date.none.fl_str_mv 2014-05
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http://purl.org/coar/resource_type/c_8042
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status_str submittedVersion
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