Quotation Walther, Herbert, Stiassny, Alfred. 2009. International Comparisons of Household Saving Rates and Hidden Income..


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Abstract

In this paper, it is argued that shadow activities and different levels of marketization of household production systematically distort international comparisons of aggregate gross household saving rates (HSR): Higher shares of hidden income increase observed HSR. Cross-sectional data for eighteen (twenty-four) countries covering a period of a decade show that gross HSR are positively related to the degree of corruption (used as a proxy of the propensity to shift economic activities into the shadow) and to the share of income from property and self-employment. They are negatively related to the female employment rate, the ratio of indirect taxes to direct taxes and to the tax wedge. A plausible story behind these phenomena might be that unobserved consumption and 'wages' in the black labor market induce an upward bias of observed HSR and profit shares, while the price level effects of a higher share of indirect taxes and a 'welfare state' effect lower observed HSR. As expected, the female employment rate (used as an indicator of marketization) is negatively related to household saving rates.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Working/discussion paper, preprint
Language English
Title International Comparisons of Household Saving Rates and Hidden Income.
Year 2009

Associations

People
Walther, Herbert (Details)
Stiassny, Alfred (Details)
Organization
Institute for Quantitative Economics IN (Details)
Institute for Labor Economics IN (Details)
Research areas (Ă–STAT Classification 'Statistik Austria')
5300 Economics (Details)
5304 Labour market research (Details)
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