Estimation of Undisclosed Household Earnings Based on the Pissarides-Weber Model Modification

Lyudmila Nivorozhkina, Sergey Arzhenovskiy, Svetlana Galazova
International Journal of Economics and Business Administration, Volume VIII, Issue 4, 635-646, 2020
DOI: 10.35808/ijeba/614


Purpose: The issue of undisclosed household earnings prevalence and volume quantitative characteristics in Russia is considered in this article. Design / Methodology / Approach: The undisclosed earnings’ prevalence econometric estimate was carried out on the panel data of the “Russian Monitoring of the Economic Situation and Health of the Population of the Higher School of Economics” (periods from 2000 to 2017) based on the Pissarides-Weber model modification, which describes the behavior of the consumer household taking into account undisclosed earning on the one hand and the relationship between income and consumption on the other hand. Findings: The households share estimates that derive undisclosed earning and the undisclosed earning share showed that they were declined during the period under review, and their contribution to poverty and inequality was indicated. Practical Implications: The presented results are important for adjusting the social and economic state policy, considering the undisclosed earnings’ impact on the population well-being level. Originality / Value: For the first time, an econometric assessment of the undisclosed earnings of the population was carried out using microdata covering a long period of time, the trends that indicate a decrease in the prevalence and volume of undisclosed earning among Russian households during the study period have been revealed.

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