Shadow Economies Around the World: Size, Causes, and Consequences

January 1, 2000

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Format: Chicago

Friedrich Schneider, and Dominik Enste. Shadow Economies Around the World: Size, Causes, and Consequences, (USA: International Monetary Fund, 2000) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper presents estimates of the size of the shadow economy in 76 developing, transition, and OECD countries, which are derived by combining figures from different estimation methods. We describe and discuss the strengths and weaknesses of the different estimation methods. We find that the growth of the shadow economy—which is now remarkably large in the 76 countries—is strongly related to increasing burdens of taxation and social security contributions, as well as to the extent of state regulatory activities. Rising corruption also has a clearly positive impact on the growth of the shadow economy.

Subject: Currencies, Informal economy, Labor, Marginal effective tax rate, Tax incidence

Keywords: Economic activity, Indirect tax, Labor force, Shadow economy, Tax burden, WP

Publication Details

Pages:

56
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2000/026
Stock No:

WPIEA0262000
ISBN:

9781451844375
ISSN:

1018-5941

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