Estimations of the size and development of the shadow economy for 145 countries, including developing, transition and highly developed OECD economies over the period 1999 to 2003 are presented. The average size of the shadow economy (as a percent of “official” GDP) in 2002/03 in 96 developing countries is 38.7%, in 25 transition countries 40.1%, in 21 OECD countries 16.3% and in 3 Communist countries 22.3%. An increased burden of taxation and social security contributions, combined with a labor market regulation are the driving forces of the shadow economy. Finally, the various estimation methods are discussed and critically evaluated.
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Paper provided by Center for Research in Economics, Management and the Arts (CREMA) in its series CREMA Working Paper Series with number
2005-13.
Find related papers by JEL classification: O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements O5 - Economic Development, Technological Change, and Growth - - Economywide Country Studies D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation H2 - Public Economics - - Taxation, Subsidies, and Revenue H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
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