Given how many of us find ourselves doing more or less rigorous research on the self-employed who want, need and use financial services, I thought this recent World Bank blog post might be of interest to some on the list. From the blog:
"The self-employed often underreport income to tax authorities. Less is known about how trustworthy the income reported on household surveys is, but there is a concern that they may also underreport their income in surveys too – either because of concerns about it getting linked to official records, or because the easiest number for them to report is the one they tell the authorities. This raises obvious concerns about the measurement of items such as the poverty levels of the unemployed, the differential income gap between wage work and self-employment, and many other such uses.
In a paper recently published in the Review of Economics and Statistics, Hurst, Li and Pugsley (ungated version) propose using Engel curves to detect the level of underreporting of the self-employed."
Posted by: Sean Kline <seankline@alumni.lse.ac.uk>
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