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Size and Development of the Shadow Economy and of Do-it-yourself Activities in Germany

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Author Info
Andreas Bühn ()
Alexander Karmann ()
Friedrich Schneider ()

Additional information is available for the following registered author(s):

Abstract

This paper presents the first MIMIC (multiple indicator multiple causes) model estimate of the size and development of the shadow economy and of do-it-yourself (DIY) activities in Germany from 1970 to 2005. By 2005, they reached a level of about 17% and 4.94%. While the shadow economy has regularly increased over the years, DIY activities – though quite sizeable – have remained more or less constant since the early 1990s. The driving forces for the shadow economy are regulation and tax burden whereas for DIY activities, the level of unemployment is the main factor.

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File URL: http://www.cesifo-group.de/DocCIDL/cesifo1_wp2021.pdf
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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. 2021.

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Date of creation: 2007
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Handle: RePEc:ces:ceswps:_2021

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Related research
Keywords: shadow economy; do-it-yourself activities; tax burden; regulation; domestic currency in circulation; unemployment; MIMIC models;

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

References listed on IDEAS
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    Other versions:
  2. Tanzi, Vito, 1999. "Uses and Abuses of Estimates of the Underground Economy," Economic Journal, Royal Economic Society, vol. 109(456), pages F338-47, June. [Downloadable!] (restricted)
  3. 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:
  8. Schneider, Friedrich, 2005. "Shadow economies around the world: what do we really know?," European Journal of Political Economy, Elsevier, vol. 21(3), pages 598-642, September. [Downloadable!] (restricted)
    Other versions:
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    Other versions:
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  17. repec:cup:cbooks:9780521891073 is not listed on IDEAS
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    Other versions:
  21. Giles, David E A, 1999. "Measuring the Hidden Economy: Implications for Econometric Modelling," Economic Journal, Royal Economic Society, vol. 109(456), pages F370-80, June. [Downloadable!] (restricted)
    Other versions:
  22. Giles, David E A, 1997. "Testing for Asymmetry in the Measured and Underground Business Cycles in New Zealand," The Economic Record, The Economic Society of Australia, vol. 73(222), pages 225-32, September.
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    Other versions:
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