As social security contribution is considered as a cost in a PAYG system, both for employee and employer, some individuals try to evade by underreport their wages.
By measurement of this evasion can evaluate the lost income of a social security fund by contribution evasion.
Have you read any paper studying the topic?
Every help is appreciated.
Thanks.
It sounds as if your question is overlapping with the phenomenon of unreported employment and tax fraud. Obviously, once wages are taxed properly, social security should be able to find out underreporting. And in case employee and employer want to avoid social security contributions, they're likely to try the same with taxes...
You are right Mr Thomas Neusius but in some countries (including my country) tax and social security administrations are not integrated but operate separately. Also, they have different regulations. For example, basic exemption for tax purposes is nearly two times of social security minimum wage (and of course it is taxed at source). Therefore, contribution evasion doesn't necessarily means tax evasion.
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