Income hiding and informal redistribution: A lab-in-the-field experiment in Senegal

Paola Villar, Marie Boltz, Karine Marazyan

Research output: Contribution to journalArticle

Abstract

We estimate the hidden cost of social obligations to redistribute exploiting data from a controlled setting in urban Senegal, which combines lab-in-the-field measures and out-of-lab follow-up data. We estimate a social tax of about 9 percent. When given the opportunity to get hidden income, individuals decrease by 26 percent the share of gains they transfer to kin — mostly outside the household — and increase health and personal expenses. We expand on prior literature by both identifying the individual cost of informal redistribution and then relating it to postexperiment resource-allocation decisions, and by disentangling intra- and interhousehold redistributive pressure.
Original languageEnglish
Pages (from-to)78-92
Number of pages15
JournalJournal of Development Economics
Volume137
DOIs
Publication statusPublished - 1 Mar 2019

Keywords

  • income observability
  • informal redistribution
  • extended families
  • resource allocation decision
  • lab-in-the-field experiment
  • Africa
  • Informal redistribution
  • Resource allocation decisions
  • Extended families
  • Lab-in-the-field experiment
  • Income observability

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