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

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  • Pierre-Guillaume Méon
  • Friedrich Schneider
  • Laurent Weill

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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Bibliographic Info

Paper provided by ULB -- Universite Libre de Bruxelles in its series Working Papers CEB with number 07-027.RS.

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Length: 16 p.
Date of creation: Oct 2007
Date of revision:
Publication status: Published by: Centre Emile Bernheim, Bruxelles
Handle: RePEc:sol:wpaper:07-027

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Keywords: shadow economy; income; aggregate productivity; efficiency.;

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References

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Citations

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Cited by:
  1. Oscar Bernal Diaz & Kim Oosterlinck & Ariane Szafarz, 2009. "Observing bailout expectations during a total eclipse of the sun," DULBEA Working Papers 09-01.RS, ULB -- Universite Libre de Bruxelles.
  2. Ariane Szafarz, 2007. "Hiring people-like-yourself: a representation of discrimination on the job market," Working Papers CEB 07-021.RS, ULB -- Universite Libre de Bruxelles.
  3. Benoît Mahy & François Rycx & Mélanie Volral, 2008. "L'influence de la dispersion salariale sur la performance des grandes entreprises belges," DULBEA Working Papers 08-13.RS, ULB -- Universite Libre de Bruxelles.
  4. Charles Plaigin, 2009. "Exploratory study on the presence of cultural and institutional growth spillovers," DULBEA Working Papers 09-03.RS, ULB -- Universite Libre de Bruxelles.
  5. Hassan Ayoub & Jérôme Creel & Etienne Farvaque, 2008. "Détermination du niveau des prix et finances: le cas du Liban 1965-2005," DULBEA Working Papers 08-10.RS, ULB -- Universite Libre de Bruxelles.
  6. Pierre-Guillaume Méon & Ariane Szafarz, 2008. "Labor market discrimination as an agency cost," DULBEA Working Papers 08-19.RS, ULB -- Universite Libre de Bruxelles.
  7. Ilan Tojerow, 2008. "Industry wage differential, rent sharing and gender in Belgium," DULBEA Working Papers 08-20.RS, ULB -- Universite Libre de Bruxelles.
  8. Jean-Luc Demeulemeester & Olivier Debande, 2008. "Quality and Variety Competition in Higher Education," Working Papers 08-10, Association Française de Cliométrie (AFC).
  9. Abdeslam Marfouk, 2008. "The African brain drain: scope and determinants," DULBEA Working Papers 08-07.RS, ULB -- Universite Libre de Bruxelles.

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