Williams, C.C. orcid.org/0000-0002-3610-1933 and Horodnic, I.A. (2017) Tackling the participation of Europe’s rural population in the shadow economy. AGER: Journal of Depopulation and Rural Development Studies, 22. ISSN 1578-7168
Abstract
To tackle the shadow economy, an emergent literature has called for the conventional rational economic actor approach (which uses deterrents to ensure that the costs of engaging in shadow work outweigh the benefits) to be replaced or complemented by a social actor approach which focuses upon improving tax morale. To evaluate the relevance and validity of doing this in rural areas, we here report face-to-face interviews conducted with 9,677 rural dwellers conducted across the 28 member states of the European Union (EU28) in 2013. Multilevel logistic regression analysis reveals that both approaches significantly reduce the rural shadow economy. When tax morale is high, however, deterrence measures have little impact on reducing the rural shadow economy and it is only when tax morale is low that raising the level of deterrents has greater impacts, with increasing the risks of detection (which is problematic in dispersed rural populations) leading to higher reductions in the rural shadow economy than increasing punishments. The paper thus concludes by calling for greater emphasis in rural areas on improving tax morale to tackle the shadow economy in Europe and beyond.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2017 CEDDAR. This article is open access. |
Keywords: | Informal sector; tax morale; tax evasion; rural economies; European Union |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Management School (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 21 Mar 2017 13:37 |
Last Modified: | 25 Jul 2017 10:48 |
Published Version: | https://doi.org/10.4422/ager.2016.10 |
Status: | Published |
Publisher: | Centro de Estudios sobre la Despoblación y Desarrollo de Áreas Rurales |
Refereed: | Yes |
Identification Number: | 10.4422/ager.2016.10 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:112997 |