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Survey on the Shadow Economy and Undeclared Earnings in OECD Countries

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  • Lars P. Feld
  • Friedrich Schneider

Abstract

. In most OECD countries the policy instrument of choice to prevent people from working in the shadows has been deterrence. While deterrence is well founded from a theoretical point of view, the empirical evidence on its success is weak: tax policies and state deregulation appear to work much better. The discussion of the recent literature underlines that in addition to economic opportunities, the overall situation in the labor market and unemployment are crucial for an understanding of the dynamics of the shadow economy.

Suggested Citation

  • Lars P. Feld & Friedrich Schneider, 2010. "Survey on the Shadow Economy and Undeclared Earnings in OECD Countries," German Economic Review, Verein für Socialpolitik, vol. 11(2), pages 109-149, May.
    • Handle: RePEc:bla:germec:v:11:y:2010:i:2:p:109-149
    DOI: 10.1111/j.1468-0475.2010.00509.x
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