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Does taking the shadow economy into account matter to measure aggregate efficiency?

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Author Info
Pierre-Guillaume Méon () (DULBEA, Université libre de Bruxelles, Brussels)
Friedrich Schneider () (Department of Economics, Austria.)
Laurent Weill () (Université Robert Schuman, Institut d’Etudes Politiques, Strasbourg)

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Abstract

We analyze how adding the shadow economy to official output figures affects estimated technical efficiency at the country level. We find that this only slightly affects the ranking of efficiency scores, but increases average efficiency in a sample of 87 to 97 countries, both developed and developing. Our results are robust to the functional form of the production technology and the adjustment of labour to account for years of schooling.

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Publisher Info
Paper provided by Université libre de Bruxelles, Department of Applied Economics (DULBEA) in its series Working Papers DULBEA with number 07-18.RS.

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Length: 26 pages
Date of creation: Oct 2007
Date of revision:
Handle: RePEc:dul:wpaper:07-18rs

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Web page: http://www.dulbea.org
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For technical questions regarding this item, or to correct its listing, contact: (Pierre-Guillaume Méon).

Related research
Keywords: shadow economy income aggregate productivity efficiency.

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Find related papers by JEL classification:
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
O5 - Economic Development, Technological Change, and Growth - - Economywide Country Studies

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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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  19. Pierre-Guillaume Méon & Anne-France Delannay, 2006. "The impact of European integration on the nineties’ wave of mergers and acquisitions," Working Papers DULBEA 06-12.RS, Université libre de Bruxelles, Department of Applied Economics (DULBEA). [Downloadable!]
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  23. Pierre-Guillaume Méon & Laurent Weill, 2005. "Can mergers in Europe help banks hedge against macroeconomic risk?," Applied Financial Economics, Taylor and Francis Journals, vol. 15(5), pages 315-326, March. [Downloadable!] (restricted)
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  24. Verena Bikar & Michele Cincera & Henri Capron, 2006. "An Integrated Evaluation Scheme of Innovation Systems from an Institutional Perspective," Working Papers DULBEA 06-09.RS, Université libre de Bruxelles, Department of Applied Economics (DULBEA). [Downloadable!]
  25. Khalid Sekkat & Marie-Ange Veganzones-Varoudakis, 2005. "Trade and Foreign Exchange Liberalization, Investment Climate and FDI in the MENA," Working Papers DULBEA 05-06.RS, Université libre de Bruxelles, Department of Applied Economics (DULBEA). [Downloadable!]
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  28. Michele Cincera & Lydia Greunz & Jean-Luc Guyot & Olivier Lohest, 2006. "Capital humain et processus de création d’entreprise : le cas des primo-créateurs wallons," Working Papers DULBEA 06-11.RS, Université libre de Bruxelles, Department of Applied Economics (DULBEA). [Downloadable!]
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  30. Síle O’Dorchai & Robert Plasman & François Rycx, 2007. "The Part-Time Wage Penalty in European Countries: How Large Is It for Men?," IZA Discussion Papers 2591, Institute for the Study of Labor (IZA). [Downloadable!]
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  31. Robert Plasman & Michael Rusinek & Ilan Tojerow, 2007. "La régionalisation de la négociation salariale en Belgique : vraie nécessité ou faux débat ?," Working Papers DULBEA 07-04.RS, Université libre de Bruxelles, Department of Applied Economics (DULBEA). [Downloadable!]
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Cited by:
(explanations, 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.)

  1. Ariane Szafarz, 2007. "Hiring People-like-Yourself: A Representation of Discrimination on the Job Market," Working Papers DULBEA 07-21.RS, Université libre de Bruxelles, Department of Applied Economics (DULBEA). [Downloadable!]
    Other versions:
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