Family Networks and Income Hiding: Evidence from Lab-in-the-Field Experiments in Rural Liberia

Beekman, Gonne; Gatto, Marcel; Nillesen, Eleonora

doi:10.1093/jae/ejv008

Cited by 25 publications

(19 citation statements)

References 21 publications

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“…reduce their expected profits) to hide positive income shocks from their community (especially unmarried women who have recently been asked for gifts or loans by relatives). Likewise, in a similar type of experiment conducted in Liberia, Beekman et al (2015) find that individuals with strong family ties within the community tend to make lower profitable investments than individuals with weaker family ties, and are also willing to pay to hide their money. Exploiting data from a controlled setting in urban Senegal, which combines lab-in-the-field measures and out-of-lab follow-up data, Boltz et al (2016) estimate a kinship tax of about 9%.…”

Section: Forced Mutual Help Kinship Taxation and Entrepreneurship Inmentioning

confidence: 86%

“…In fact, empirical evidence show that local entrepreneurs will do everything they can to hide this information (Jakiela and Ozier ; Beekman et al . ; Baland et al . ).…”

Section: The Modelmentioning

confidence: 99%

“…Likewise, in a similar type of experiment conducted in Liberia, Beekman et al . () find that individuals with strong family ties within the community tend to make lower profitable investments than individuals with weaker family ties, and are also willing to pay to hide their money. Exploiting data from a controlled setting in urban Senegal, which combines lab‐in‐the‐field measures and out‐of‐lab follow‐up data, Boltz et al .…”

Section: Introductionmentioning

confidence: 95%

“…We focus on a lump-sum tax as it is a priori less distortive than a proportional tax and is consistent with the fact that relatives do not necessarily observe entrepreneurs' profit. In fact, empirical evidence show that local entrepreneurs will do everything they can to hide this information (Jakiela and Ozier 2016;Beekman et al 2015;Baland et al 2011). Nevertheless our results are robust to the introduction of a proportional tax (see the discussion below).…”

Section: The Modelmentioning

confidence: 99%

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Does Social Pressure Hinder Entrepreneurship in Africa? The Forced Mutual Help Hypothesis

2019

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In the absence of a public safety net, wealthy Africans have the social obligation to share their resources with their needy relatives in the form of cash transfers and inefficient family hiring. We develop a model of entrepreneurial choice that accounts for this social redistributive constraint. We derive predictions regarding employment choices, productivity, and profitability of firms run by entrepreneurs of African versus non‐African origin. Everything else equal, local firms are overstaffed and less productive than firms owned by non‐locals, which discourages local entrepreneurship. Using data from the manufacturing sector, we illustrate the theory by structurally estimating the proportion of missing African entrepreneurs. Our estimates, which are suggestive due to the data limitation, vary between 8% and 12.6% of the formal sector workforce. Implications for the role of social protection are discussed.

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Section: Forced Mutual Help Kinship Taxation and Entrepreneurship Inmentioning

confidence: 86%

“…In fact, empirical evidence show that local entrepreneurs will do everything they can to hide this information (Jakiela and Ozier ; Beekman et al . ; Baland et al . ).…”

Section: The Modelmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 95%

Section: The Modelmentioning

confidence: 99%

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Does Social Pressure Hinder Entrepreneurship in Africa? The Forced Mutual Help Hypothesis

2019

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“…For instance, Hadness et al (2013) investigate how the effort exerted by a small sample of tailors in Burkina Faso varied depending on whether knowledge of a lucrative contract was made public to their extended family network or not. Observability implies a significant reduction in productivity (see also Beekman et al 2015).…”

Section: The Role Of Asymmetric Informationmentioning

confidence: 99%

Intra-household bargaining in poor countries

Baland¹,

Ziparo²

2017

WIDER Working Paper

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This paper is intended to bridge the theoretical literature describing efficient intrahousehold behaviour and the development literature that collects empirical regularities pointing toward the existence of strategic decision-making among spouses. It examines the key elements of the collective model and discusses its relevance to analysing intra-household behaviour in poor countries. It explores the role that risk and uncertainty, information asymmetries, power imbalances, arranged marriages, strategic investment, gender norms, and extended households play in the attainment of efficiency.

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To Whom Do Business Owner-Managers Feel Responsible? Weighting conflicting social responsibilities in Rwanda

Noisette

2023

J Bus Ethics

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Family Networks and Income Hiding: Evidence from Lab-in-the-Field Experiments in Rural Liberia

Cited by 25 publications

References 21 publications

Does Social Pressure Hinder Entrepreneurship in Africa? The Forced Mutual Help Hypothesis

Does Social Pressure Hinder Entrepreneurship in Africa? The Forced Mutual Help Hypothesis

Intra-household bargaining in poor countries

To Whom Do Business Owner-Managers Feel Responsible? Weighting conflicting social responsibilities in Rwanda

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