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Survey on the Shadow Economy and Undeclared Earnings in OECD Countries

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  • Feld Lars P.

    (University of Heidelberg,Heidelberg,Baden-Württemberg, Germany)

  • Schneider Friedrich

    (Johannes Kepler University, Linz,Linz, Austria)

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

  • Feld Lars P. & Schneider Friedrich, 2010. "Survey on the Shadow Economy and Undeclared Earnings in OECD Countries," German Economic Review, De Gruyter, vol. 11(2), pages 109-149, May.
    • Handle: RePEc:bpj:germec:v:11:y:2010:i:2:p:109-149
    DOI: 10.1111/j.1468-0475.2009.00466.x
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