Tax Avoidance, Human Capital Accumulation and Economic Growth

• Authors: Judith Panadés.
• BSE Working Paper: 110087 | September 15
• Keywords: economic growth , tax avoidance , tax non-compliance
• JEL codes: E62, H26, O30, O40, O41
• economic growth
• tax avoidance
• tax non-compliance

Human capital accumulation may negatively affect economic growth by increasing tax avoidance and reducing effective tax rates and productive public investment. This paper analyzes how the endogenous feedback between human capital accumulation and tax avoidance affects economic growth and macroeconomic dynamics. Our findings show that this interaction produces remarkable growth and welfare effects.