Publication at Faculty of Social Sciences, Faculty of Mathematics and Physics, Centre for Economic Research and Graduate Education |
2014
Abstract
This study applies three different methods widely used in the literature to track changes in shadow economic activity in Georgia following a drastic tax reform in 2005. The first method is a currency demand approach based on macrolevel data.
The second and third methods rely on micro level data from household surveys. Overall, we find evidence that the amount of income underreporting decreased in the years following the reform.
The biggest change is observed for households headed by a farmer, followed by 'other' types of households where the head does not report any working status.