Advanced Search
MyIDEAS: Login to save this paper or follow this series

Shadow Economies in Highly Developed OECD Countries: What Are the Driving Forces?

Contents:

Author Info

  • Schneider, Friedrich

    ()
    (University of Linz)

  • Buehn, Andreas

    ()
    (Utrecht University)

Abstract

In this paper the main focus lies on 'driving forces' of the development and size of the shadow economy in highly developed 39 OECD countries. The influential factors on the shadow economy are tax policies and state regulation, which, if they rise, increase the shadow economy, but also other factors like economic ones (unemployment) are considered, too. Specifically it is shown that the main driving forces are unemployment, self-employment and the tax burden, which have different weights in these 39 countries. Between 1999 and 2010 indirect taxes have by far the largest relative impact (29.4%), followed by self-employment (22.2%), unemployment (16.9%), personal income taxes (13.1%) and tax morale (9.5%).

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://ftp.iza.org/dp6891.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6891.

as in new window
Length: 34 pages
Date of creation: Oct 2012
Date of revision:
Handle: RePEc:iza:izadps:dp6891

Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org

Order Information:
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Email:

Related research

Keywords: state regulation; tax pressure; tax morale; shadow economy; undeclared work;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

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.:
as in new window
  1. Friedman, Eric & Johnson, Simon & Kaufmann, Daniel & Zoido-Lobaton, Pablo, 2000. "Dodging the grabbing hand: the determinants of unofficial activity in 69 countries," Journal of Public Economics, Elsevier, Elsevier, vol. 76(3), pages 459-493, June.
  2. Benno Torgler & Friedrich Schneider, 2007. "The Impact of Tax Morale and Institutional Quality on the Shadow Economy," CREMA Working Paper Series, Center for Research in Economics, Management and the Arts (CREMA) 2007-01, Center for Research in Economics, Management and the Arts (CREMA).
  3. Friedrich Schneider, 2004. "Shadow Economies around the World: What do we really know?," IAW Discussion Papers, Institut für Angewandte Wirtschaftsforschung (IAW) 16, Institut für Angewandte Wirtschaftsforschung (IAW).
  4. Axel Dreher & Christos Kotsogiannis & Steve McCorriston, 2005. "How do Institutions Affect Corruption and the Shadow Economy?," Public Economics, EconWPA 0502012, EconWPA, revised 24 Feb 2005.
  5. Bhattacharyya, Dilip K, 1999. "On the Economic Rationale of Estimating the Hidden Economy," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 109(456), pages F348-59, June.
  6. Dominik H. Enste & Friedrich Schneider, 2000. "Shadow Economies: Size, Causes, and Consequences," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 38(1), pages 77-114, March.
  7. Allingham, Michael G. & Sandmo, Agnar, 1972. "Income tax evasion: a theoretical analysis," Journal of Public Economics, Elsevier, Elsevier, vol. 1(3-4), pages 323-338, November.
  8. Colin Williams & Jan Windebank, 2001. "Reconceptualising paid informal exchange: some lessons from English cities," Environment and Planning A, Pion Ltd, London, Pion Ltd, London, vol. 33(1), pages 121-140, January.
  9. Schneider Friedrich, 2010. "The Influence of Public Institutions on the Shadow Economy: An Empirical Investigation for OECD Countries," Review of Law & Economics, De Gruyter, De Gruyter, vol. 6(3), pages 441-468, December.
  10. Kirchler,Erich, 2007. "The Economic Psychology of Tax Behaviour," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521876742.
  11. Andreas Buehn & Alexander Karmann & Friedrich Schneider, 2009. "Shadow Economy and Do-it-Yourself Activities: The German Case," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, Mohr Siebeck, Tübingen, vol. 165(4), pages 701-722, December.
  12. Andreas Buehn & Friedrich Schneider, 2012. "Shadow economies around the world: novel insights, accepted knowledge, and new estimates," International Tax and Public Finance, Springer, Springer, vol. 19(1), pages 139-171, February.
  13. Friedrich Schneider & Dominik Enste, 2000. "Shadow Economies Around the World," IMF Working Papers, International Monetary Fund 00/26, International Monetary Fund.
  14. Friedrich Schneider & Désirée Teobaldelli, 2012. "Beyond the Veil of Ignorance: The Influence of Direct Democracy on the Shadow Economy," CESifo Working Paper Series, CESifo Group Munich 3749, CESifo Group Munich.
  15. Roberto Dell´Anno, 2007. "The shadow economy in Portugal: An analysis with the MIMIC approach," Journal of Applied Economics, Universidad del CEMA, Universidad del CEMA, vol. 0, pages 253-277, November.
  16. Désirée Teobaldelli, 2011. "Federalism and the shadow economy," Public Choice, Springer, Springer, vol. 146(3), pages 269-289, March.
  17. Egle Tafenau & Helmut Herwartz & Friedrich Schneider, 2010. "Regional Estimates of the Shadow Economy in Europe," International Economic Journal, Taylor & Francis Journals, Taylor & Francis Journals, vol. 24(4), pages 629-636.
  18. Giles, David E A, 1999. "Measuring the Hidden Economy: Implications for Econometric Modelling," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 109(456), pages F370-80, June.
  19. David KUCERA & Leanne RONCOLATO, 2008. "Informal employment: Two contested policy issues," International Labour Review, International Labour Organization, International Labour Organization, vol. 147(4), pages 321-348, December.
  20. Andreas Buehn, 2012. "The Shadow Economy in G erman Regions: An Empirical Assessment," German Economic Review, Verein für Socialpolitik, Verein für Socialpolitik, vol. 13(3), pages 275-290, 08.
  21. Tanzi, Vito, 1999. "Uses and Abuses of Estimates of the Underground Economy," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 109(456), pages F338-47, June.
  22. Thomas, Jim, 1999. "Quantifying the Black Economy: 'Measurement without Theory' Yet Again?," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 109(456), pages F381-89, June.
  23. Andreas Buehn & Stefan Eichler, 2009. "Smuggling Illegal versus Legal Goods across the U.S.-Mexico Border: A Structural Equations Model Approach," Southern Economic Journal, Southern Economic Association, Southern Economic Association, vol. 76(2), pages 328-350, October.
  24. Enrico Marcelli, 2004. "Unauthorized Mexican Immigration, Day Labour and other Lower-wage Informal Employment in California," Regional Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 38(1), pages 1-13.
Full references (including those not matched with items on IDEAS)

Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. What drives the size of the shadow economy?
    by Economic Logician in Economic Logic on 2012-11-07 15:17:00
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Friedrich Schneider, 2013. "Size and Progression of the Shadow Economies of Turkey and Other OECD Countries from 2003 to 2013; Some New Facts," Ekonomi-tek - International Economics Journal, Turkish Economic Association, Turkish Economic Association, vol. 2(2), pages 83-116, May.
  2. Andreas Bühn & Friedrich Schneider, 2012. "Size and Development of Tax Evasion in 38 OECD Countries: What do we (not) know?," CESifo Working Paper Series, CESifo Group Munich 4004, CESifo Group Munich.
  3. Friedrich Schneider & Andreas Bühn, 2013. "Estimating the Size of the Shadow Economy: Methods, Problems and Open Questions," CESifo Working Paper Series, CESifo Group Munich 4448, CESifo Group Munich.
  4. Schneider, Friedrich, 2014. "The Shadow Economy and Shadow Labor Force: A Survey of Recent Developments," IZA Discussion Papers, Institute for the Study of Labor (IZA) 8278, Institute for the Study of Labor (IZA).
  5. Emilio Colombo & Luisanna Onnis & Patrizio Tirelli, 2013. "Shadow economies at times of banking crises: empirics and theory," Working Papers, University of Milano-Bicocca, Department of Economics 234, University of Milano-Bicocca, Department of Economics, revised Feb 2013.
  6. Ferré Carracedo, Montserrat & García Fortuny, Judit & Manzano, Carolina, 2013. "The Conservativeness of the Central Bank when Institutional Quality is Poor," Working Papers, Universitat Rovira i Virgili, Department of Economics 2072/222198, Universitat Rovira i Virgili, Department of Economics.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp6891. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.