IDEAS home Printed from https://ideas.repec.org/a/jbl/ref000/v9y2025i2id2770.html

Informal Earnings and Domestic Production - the size of the shadow economy of the household. Case of Turkey

Author

Listed:
  • Jacek Jankiewicz

    (Poznań University of Economics and Business, Poland)

  • Armagan Aktuna Gunes

    (Ph.D from Paris School of Economics, Université Paris I Panthéon-Sorbonne, Centre d’Economie de la Sorbonne)

  • Okay Gunes

    (Ph.D from Université Paris I Panthéon-Sorbonne, Centre d’Economie de la Sorbonne)

  • Przemysław Garsztka

    (Poznan University of Economics and Business, Poznan)

Abstract

We performed our calculations to find out the value of domestic production and the size of the informal economy of the households. The dataset used in this estimation was obtained by matching the Turkey Time Use Survey of 2006 with the Household Budget Survey for the years 2007 to 2011. Informal earnings were measured using household budgetary declarations and the concept of full income (including monetary values of time use on non-market activities). In our analysis we use terms of extended incomes (i.e. monetary incomes with the informal earnings of households) and extended full incomes (i.e. monetary incomes and monetary time values including informal earnings). An important result is that an increase in domestic production yields a decrease in the size of the informal economy for the self-employed, but it is contrary in case of among wage earners. The average estimation of the size of the informal economy in Turkey decreased on average from 73.59% to 70.89% of GDP respectively for monetary and full expenditure for the years 2007-2011. Further deeper analysis is needed to analyse income inequality among wage earners and self-employed workers participating in informal activities.

Suggested Citation

  • Jacek Jankiewicz & Armagan Aktuna Gunes & Okay Gunes & Przemysław Garsztka, 2025. "Informal Earnings and Domestic Production - the size of the shadow economy of the household. Case of Turkey," Research Papers in Economics and Finance, Poznań University of Economics and Business, vol. 9(2), pages 117-142, December.
    • Handle: RePEc:jbl:ref000:v:9:y:2025:i:2:id:2770
    DOI: 10.18559/ref.2025.2.2770
    as

    Download full text from publisher

    File URL: https://journals.ue.poznan.pl/REF/article/view/2770
    File Function: Abstract page
    Download Restriction: no
    File URL: https://journals.ue.poznan.pl/REF/article/download/2770/1131
    File Function: Full text
    Download Restriction: no
    File URL: https://libkey.io/10.18559/ref.2025.2.2770?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Pissarides, Christopher A. & Weber, Guglielmo, 1989. "An expenditure-based estimate of Britain's black economy," Journal of Public Economics, Elsevier, vol. 39(1), pages 17-32, June.
    2. Lindsay Tedds, 2010. "Estimating the income reporting function for the self-employed," Empirical Economics, Springer, vol. 38(3), pages 669-687, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Torregrosa-Hetland, Sara, 2016. "Sticky Income Inequality In The Spanish Transition (1973-1990)," Revista de Historia Económica / Journal of Iberian and Latin American Economic History, Cambridge University Press, vol. 34(1), pages 39-80, March.
    2. Figari, Francesco & Bazzoli, Martina & Di Caro, Paolo & V. Fiorio, Carlo & Manzo, Marco, 2020. "Size, heterogeneity and distributional effects of self-employment income tax evasion in Italy," EUROMOD Working Papers EM18/20, EUROMOD at the Institute for Social and Economic Research.
    3. Odd E Nygård & Joel Slemrod & Thor O Thoresen, 2019. "Distributional Implications of Joint Tax Evasion," The Economic Journal, Royal Economic Society, vol. 129(620), pages 1894-1923.
    4. Diego Martinez-Lopez, 2013. "The underreporting of income by self-employed workers in Spain," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 4(4), pages 353-371, November.
    5. Hanousek, Jan & Lichard, Tomáš & Torosyan, Karine, 2016. "‘Flattening’ the Tax Evasion: Evidence from the Post-Communist Natural Experiment," CEPR Discussion Papers 11229, Centre for Economic Policy Research.
    6. Tomas Lichard & Jan Hanousek & Randall K. Filer, 2012. "Measuring the Shadow Economy: Endogenous Switching Regression with Unobserved Separation," Economics Working Paper Archive at Hunter College 438, Hunter College Department of Economics.
    7. Randall K. Filer & Jan Hanousek & Tomáš Lichard & Karine Torosyan, 2019. "‘Flattening’ tax evasion? : Evidence from the post‐communist natural experiment," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 27(1), pages 223-246, January.
    8. Paulus, Alari, 2015. "Income underreporting based on income-expenditure gaps: survey vs tax records," ISER Working Paper Series 2015-15, Institute for Social and Economic Research.
    9. Lyudmila Nivorozhkina & Sergey Arzhenovskiy & Svetlana Galazova, 2020. "Estimation of Undisclosed Household Earnings Based on the Pissarides-Weber Model Modification," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(4), pages 635-646.
    10. Bonggeun Kim & John Gibson & Chul Chung, 2017. "Using Panel Data to Estimate Income Under-Reporting by the Self-Employed," Manchester School, University of Manchester, vol. 85(1), pages 41-64, January.
    11. Thomas Åstebro, 2017. "The private financial gains to entrepreneurship: Is it a good use of public money to encourage individuals to become entrepreneurs?," Small Business Economics, Springer, vol. 48(2), pages 323-329, February.
    12. Tomáš Lichard & Jan Hanousek & Randall K. Filer, 2021. "Hidden in plain sight: using household data to measure the shadow economy," Empirical Economics, Springer, vol. 60(3), pages 1449-1476, March.
    13. Armagan Tuna Aktuna-Gunes & Christophe Starzec & François Gardes, 2013. "A new estimation of the size of informal economy using monetary and full expenditures in a complete demand system," Post-Print halshs-00841346, HAL.
    14. Lidia Ceriani & Carlo V. Fiorio & Chiara Gigliarano, 2013. "The importance of choosing the data set for tax-benefit analysis," International Journal of Microsimulation, International Microsimulation Association, vol. 1(6), pages 86-121.
    15. Fernández-Bastidas, Rocío, 2023. "Entrepreneurship and tax evasion," Economic Modelling, Elsevier, vol. 128(C).
    16. Knut R. Wangen, 2005. "An Expenditure Based Estimate of Britain's Black Economy Revisited," Discussion Papers 414, Statistics Norway, Research Department.
    17. David R. Agrawal & Ronald B. Davies & Sara LaLumia & Nadine Riedel & Kimberley Scharf, 2021. "A snapshot of public finance research from immediately prior to the pandemic: IIPF 2020," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(5), pages 1276-1297, October.
    18. Friedrich Schneider & Robert Klinglmair, 2004. "Shadow economies around the world: what do we know?," Economics working papers 2004-03, Department of Economics, Johannes Kepler University Linz, Austria.
    19. Mathias Silva, 2023. "Parametric models of income distributions integrating misreporting and non-response mechanisms," AMSE Working Papers 2311, Aix-Marseille School of Economics, France.
    20. Niizeki, Takeshi & Hamaaki, Junya, 2023. "Do the self-employed underreport their income? Evidence from Japanese panel data," Journal of the Japanese and International Economies, Elsevier, vol. 67(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jbl:ref000:v:9:y:2025:i:2:id:2770. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Anna Bogajewska-Szymańska (email available below). General contact details of provider: https://journals.ue.poznan.pl/REF .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.