Self-employment and Tax Evasion: A Descriptive Analysis of Italian Provinces

This chapter investigates the relationship between tax evasion and the diffusion of self-employment in the Italian provinces (NUTS-3 level). Using a dataset that combines information coming from the Italian Revenue Agency and the Italian Labour Force Survey for the period 2014-2015, we test, in particular, whether: 1) the share of self-employment in the regional labour markets is correlated with tax evasion; 2) the sectoral structure of self-employment is correlated with tax evasion; 3) occupational profiles based on skills and task families are correlated with tax evasion. A two-stage cluster analysis on the variables correlated to tax evasion is also conducted to identify homogeneous groups of provinces. The results of this study allow to detect specific sectors and occupations to which the policy maker should pay particular attention in its local tax control activities.