The Impact of Unemployment Rate on the Dimension of Shadow Economy in Spain: A Structural Equation Approach
The paper uses annual data for the period 1970-2007 in order to estimate the size of Spanish shadow economy. In view to do so, the shadow economy is modelled like a latent variable using the structural equation model(SEM). The model includes tax burden, social benefits, subsidies, government employment, self-employment and unemployment rate as main causes of shadow economy and the results indicates that the size of informal sector oscillates between 22% and 18% of GDP in the last ten years. Investigating the relationship between the shadow economy and unemployment rate a positive relationship is marked out between this two variables.
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- El. Thalassinos & Th. Kiriazidis, 2003. "Degrees Of Integration In International Portfolio Diversification: Effective Systemic Risk," European Research Studies Journal, European Research Studies Journal, vol. 0(1-2), pages 119-130, January -.
- Friedrich Schneider & Kausik Chaudhuri & Sumana Chatterjee, 2003. "The Size and Development of the Indian Shadow Economy and a Comparison with other 18 Asian Countries: An Empirical Investigation," Economics working papers 2003-02, Department of Economics, Johannes Kepler University Linz, Austria.
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