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Corporate labour share of income and the shadow economy: a cross-country analysis

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  • Igor Fedotenkov

Abstract

This article addresses a link between the size of the shadow economy and the corporate labour share of income in the European Union. Fixed individual and time effects models suggest that there is a negative link between these two indicators. The coefficients are statistically significant if we control for other variables related to labour markets, such as unemployment rates or strictness of employment protection (regular contracts). Depending on the exact model specification, our estimates suggest that an increase in the shadow economy by 1% of GDP results in a 0.5–1% decline in the labour share of income in the corporate sector.

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  • Igor Fedotenkov, 2019. "Corporate labour share of income and the shadow economy: a cross-country analysis," Applied Economics Letters, Taylor & Francis Journals, vol. 26(4), pages 302-305, February.
    • Handle: RePEc:taf:apeclt:v:26:y:2019:i:4:p:302-305
    DOI: 10.1080/13504851.2018.1467549
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    Cited by:

    1. Nedra Baklouti & Younes Boujelbene, 2020. "A simultaneous equation model of economic growth and shadow economy: Is there a difference between the developed and developing countries?," Economic Change and Restructuring, Springer, vol. 53(1), pages 151-170, February.
    2. Dagmara Nikulin & Ewa Lechman, 2021. "Shadow Economy in Poland: Results of the Survey," SpringerBriefs in Economics, in: Shadow Economy in Poland, chapter 0, pages 49-65, Springer.

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