Does the shadow economy raise observed aggregate efficiency? A cross-country comparison
We analyze how adding the shadow economy to official output figures affects technical efficiency. We find that this only slightly affects the ranking of efficiency scores, but increases average efficiency. Our results are robust to the functional form of the production technology and the adjustment of labor to account for years of schooling.
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- Francesco Caselli, 2005.
"Accounting for Cross-Country Income Differences,"
CEP Discussion Papers
dp0667, Centre for Economic Performance, LSE.
- Friedrich Schneider, 2004.
"Shadow Economies around the World: What do we really know?,"
IAW Discussion Papers
16, Institut für Angewandte Wirtschaftsforschung (IAW).
- Schneider, Friedrich, 2005. "Shadow economies around the world: what do we really know?," European Journal of Political Economy, Elsevier, vol. 21(3), pages 598-642, September.
- Kneller, Richard & Andrew Stevens, Philip, 2003. "The specification of the aggregate production function in the presence of inefficiency," Economics Letters, Elsevier, vol. 81(2), pages 223-226, November.
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