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Shadow Economies around the World: What Do We Know?

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Author Info
Friedrich Schneider ()
Robert Klinglmair ()

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Abstract

Using various statistical procedures, estimates about the size of the shadow economy in 110 developing, transition and OECD countries are presented. The average size of the shadow economy (in percent of official GDP) over 1999-2000 in developing countries is 41 percent, in transition countries 38 percent and in OECD countries 18.0 percent. An increasing burden of taxation and social security contributions combined with rising state regulatory activities are the driving forces for the growth and size of the shadow economy. If the shadow economy increases by one percent the annual growth rate of the "official" GDP of a developing country (of an industrialized and/or transition country) decreases by 0.6 percent (increases by 0.8 and 1.0 respectively).

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Publisher Info
Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number CESifo Working Paper No. 1167.

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Date of creation: 2004
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Handle: RePEc:ces:ceswps:_1167

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Related research
Keywords: shadow economy; interaction of the shadow economy with the official one; tax burden;

Other versions of this item:

Find related papers by JEL classification:
D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
O50 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - General

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    Other versions:
  4. Schneider, Friedrich, 1986. " Estimating the Size of the Danish Shadow Economy Using the Currency Demand Approach: An Attempt," Scandinavian Journal of Economics, Blackwell Publishing, vol. 88(4), pages 643-68.
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    Other versions:
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    Other versions:
  11. Loayza, Norman V., 1996. "The economics of the informal sector: a simple model and some empirical evidence from Latin America," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 45(1), pages 129-162, December. [Downloadable!] (restricted)
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  14. Friedrich Schneider & Kausik Chaudhuri & Sumana Chatterjee, 2003. "The Size and Development of the Indian Shadow Economy and a Comparison with other 18 Asian Countries: An Empirical Investigation," Economics working papers 2003-02, Department of Economics, Johannes Kepler University Linz, Austria. [Downloadable!]
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    Other versions:
  22. Pissarides, Christopher A. & Weber, Guglielmo, 1989. "An expenditure-based estimate of Britain's black economy," Journal of Public Economics, Elsevier, vol. 39(1), pages 17-32, June. [Downloadable!] (restricted)
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  24. Friedrich Schneider & Dominik H. Enste, 2000. "Shadow Economies: Size, Causes, and Consequences," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 77-114, March. [Downloadable!] (restricted)
  25. Klovland, Jan Tore, 1984. " Tax Evasion and the Demand for Currency in Norway and Sweden. Is There a Hidden Relationship?," Scandinavian Journal of Economics, Blackwell Publishing, vol. 86(4), pages 423-39.
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