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Size and Development of Tax Evasion in 38 OECD Countries: What do we (not) know?

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Listed:
  • Andreas Bühn
  • Friedrich Schneider

Abstract

For the first time we develop a time series of tax evasion (in % of official GDP) for 38 OECD countries over the period 1999 to 2010 based on MIMIC model estimations of the shadow economy. Considering indirect taxation and self-employment as the driving forces of tax evasion, we observe a declining trend of tax evasion between 1999 and 2010 for all countries. The average size of tax evasion across all 38 countries over the period 1999 to 2010 is 3.2% of official GDP. The country with the highest average value is Mexico with 6.8%, followed by Turkey with 6.7%; at the lower end we find the United States and Luxembourg with 0.5% and 1.3%, respectively.

Suggested Citation

  • Andreas Bühn & Friedrich Schneider, 2012. "Size and Development of Tax Evasion in 38 OECD Countries: What do we (not) know?," CESifo Working Paper Series 4004, CESifo.
    • Handle: RePEc:ces:ceswps:_4004
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    References listed on IDEAS

    as
    1. Panayiota Lyssiotou & Panos Pashardes & Thanasis Stengos, 2004. "Estimates of the black economy based on consumer demand approaches," Economic Journal, Royal Economic Society, vol. 114(497), pages 622-640, July.
    2. Benno Torgler, 2003. "Tax Morale and Institutions," CREMA Working Paper Series 2003-09, Center for Research in Economics, Management and the Arts (CREMA).
    3. 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.
    4. Friedrich Schneider & Dominik Enste, 1999. "Shadow Economies Around the World - Size, Causes, and Consequences," CESifo Working Paper Series 196, CESifo.
    5. Lars P. Feld & Benno Torgler, 2007. "Tax Morale after the Reunification of Germany: Results from a Quasi-Natural Experiment," CREMA Working Paper Series 2007-03, Center for Research in Economics, Management and the Arts (CREMA).
    6. Thomas, Jim, 1999. "Quantifying the Black Economy: 'Measurement without Theory' Yet Again?," Economic Journal, Royal Economic Society, vol. 109(456), pages 381-389, June.
    7. Torgler, Benno & Schneider, Friedrich, 2009. "The impact of tax morale and institutional quality on the shadow economy," Journal of Economic Psychology, Elsevier, vol. 30(2), pages 228-245, April.
    8. repec:bla:germec:v:11:y:2010:i::p:109-149 is not listed on IDEAS
    9. Dominik H. Enste & Friedrich Schneider, 2000. "Shadow Economies: Size, Causes, and Consequences," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 77-114, March.
    10. Schneider, Friedrich & Buehn, Andreas, 2012. "Shadow Economies in Highly Developed OECD Countries: What Are the Driving Forces?," IZA Discussion Papers 6891, IZA Network @ LISER.
    11. Friedrich Schneider (ed.), 2011. "Handbook on the Shadow Economy," Books, Edward Elgar Publishing, number 13432.
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    More about this item

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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