Adair Morse, a visiting assistant professor of finance at the Haas School of Business at the University of California, Berkeley; Margarita Tsoutsoura, assistant professor, University of Chicago Booth School of Business; and Nikolaos Artavanis, a doctoral candidate at Virginia Tech Pamplin College of Business, said they used data involving credit applications for consumer credit products at one of the 10 large Greek banks from 2003 to 2010.
The authors studied how the bank determined the credit level for refinanced loans, new credit cards and a sample of loans in which borrowers requested more money than they received.
Morse said the team used the bank decision on the appropriate credit level to understand how much income the bank must perceive individuals to have to back out the bank's estimate of true income.
Using bank data on household borrowing, the study found highly paid, highly educated professionals were at the forefront of tax evasion in Greece including: doctors, engineers, private tutors, financial services agents, accountants and lawyers.
The study found tax evaders tended to work in occupations least likely to leave a verifiable "paper trail" for tax collectors and it might not be a coincidence the majority of Greek Parliament members' professions correlate with the largest tax evaders -- even excluding lawyers, Morse said.
Greece's income tax rate is 40 percent.