Minimum Wage and Tax Evasion: Theory and Evidence

The paper investigates the role of the minimum wage in a competi- tive economy in which there is underreporting of earnings by employed labour. The minimum wage induces higher compliance by some low- productivity workers and transforms a nominally neutral .scal system into a regressive one. A spike in the wage distribution at the mini- mum wage level appears and a positive correlation between the size of the spike and the size of the informal economy is predicted and documented using cross-country data for Europe. A further result is that employees whose officially declared earnings appear to be boosted by a minimum wage hike actually experience a decline in their true income. This prediction finds support in an empirical test using the massive increase in the minimum wage that took place in Hungary in 2001 as a quasi-natural experiment.Minimum Wage, Tax Evasion, Wage Distribution, Hungary

Minimumwage and tax evasion: theory and evidence

This paper examines the interaction between minimum wage legislation and tax evasion by employed labor. I develop a model in which firms and workers may agree to report less than the true amount of earnings to the fiscalauthorities. I show that introducing a minimum wage creates a spike in the distribution of declared earnings and induces higher compliance by some agents, thus reducing their disposable income. The comparison of food consumption before and after the massive minimum wage hike that took place in Hungary in 2001 reveals that households who appear to benefit from it actually experienced a drop compared to similar but unaffected household, thus supporting the prediction of the theory.minimum wage, tax evasion, Hungary.

World-manifold and target space anomalies in heterotic Green-Schwarz strings and five-branes

The quantum consistency of sigma-models describing the dynamics of extended objects in a curved background requires the cancellation of their world-volume anomalies, which are conformal anomalies for the heterotic string and $SO(1,5)$ Lorentz-anomalies for the heterotic five-brane, and of their ten dimensional target space anomalies. In determining these anomalies in a $D=10$ Lorentz-covariant back-ground gauge we find that for the heterotic string the worldvolume anomalies cancel for 32 heterotic fermions while for the conjectured heterotic five-brane they cancel for only 16 heterotic fermions, this result being in contrast with the string/five-brane duality conjecture. For what concerns the target space anomalies we find that the five-brane eight-form Lorentz-anomaly polynomial differs by a factor of $1/2$ from what is expected on the basis of duality. Possible implications of these results are discussed.Comment: 9 pages, no figures, talk given at the Conference "Gauge Theories, Applied Supersymmetry and Quantum Gravity", London, July 199

BRST Anomaly and Superspace Constraints of the Pure Spinor Heterotic String in a Curved Background

The pure spinor heterotic string in a generic super Yang-Mills and supergravity background is onsidered. We determine the one-loop BRST anomaly at the cohomological level. We prove that it can be absorbed by consistent corrections of the classical constraints due to Berkovits and Howe, in agreement with the Green-Schwarz cancelation mechanism

An experimental investigation of intrinsic motivations for giving

This paper presents results from a modified dictator experiment aimed at distinguishing and quantifying the two intrinsic motivations for giving: warm glow and pure altruism. In particular, we implemented a within-subject experimental design with three treatments: (i) one, where the recipient is the experimenters, which measures altruistic feelings towards the experimenters (T1), (ii) the Crumpler and Grossman (2008) design in which the recipient is a charity, and the dictator's donation crowds out one-for-one a donation by the experimenters, which aims at measuring warm glow giving (T2), (iii) a third one, with a charity recipient and no crowding out, which elicits both types of altruism (T3). We use T1 to assess to what extent altruistic feelings towards the experimenters are a potential confound for measuring warm glow in T2. We find giving in T1 not to be significantly different from T2, suggesting that the Crumpler and Grossman test is an upper bound estimate of warm glow giving. We provide a lower bound estimate based on the behavior of subjects whose estimate of warm glow giving in T2 is not confounded, that is, those who do not display altruistic feelings towards the experimenters in T1. We use these two estimates to decompose giving in T3 into warm glow and pure altruism and find them to be almost equally important. We also propose a new method of detecting warm glow motivation based on the idea that in a random-lottery incentive (RLI) scheme, such as the one employed here, warm glow benefits accumulate and may lead to satiation, whereas purely altruistic motivation does not