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The Shadow Economy and Shadow Economy Labor Force: What Do We (Not) Know?

  • Schneider, Friedrich

    ()

    (University of Linz)

In this paper the main focus lies on the development and the size of the shadow economy and of undeclared work (or shadow economy labor force) in OECD, developing and transition countries. Besides informal employment in the rural and non-rural sector also other measures of informal employment like the share of employees not covered by social security, own account workers or unpaid family workers are shown. The most influential factors on the shadow economy and/or shadow labor force are tax policies and state regulation, which, if they rise, increase both. Furthermore the discussion of the recent literature underlines that economic opportunities, the overall situation on the labor market, and unemployment are crucial for an understanding of the dynamics of the shadow economy and especially the shadow labor force.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5769.

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Length: 68 pages
Date of creation: Jun 2011
Date of revision:
Handle: RePEc:iza:izadps:dp5769
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  1. Brück, Tilman & Haisken-DeNew, John P. & Zimmermann, Klaus F., 2003. "Creating Low Skilled Jobs by Subsidizing Market-Contracted Household Work," IZA Discussion Papers 958, Institute for the Study of Labor (IZA).
  2. Stefan D. HAIGNER & Stefan JENEWEIN & Friedrich SCHNEIDER & Florian WAKOLBINGER, 2013. "Driving forces of informal labour supply and demand in Germany," International Labour Review, International Labour Organization, vol. 152(3-4), pages 507-524, December.
  3. Egle Tafenau & Helmut Herwartz & Friedrich Schneider, 2010. "Regional Estimates of the Shadow Economy in Europe," International Economic Journal, Taylor & Francis Journals, vol. 24(4), pages 629-636.
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