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Intelligence and Shadow Economy: a Cross-Country Empirical Assessment

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  • Salahodjaev, Raufhon

Abstract

This paper empirically assesses the influence of intelligence on a shadow economy, using data from 158 countries, over the period 1999-2007. The results provide strong evidence for the claim that intelligence is negatively associated with an underground economy. This paper establishes that, on average, a one standard deviation increase in IQ is associated with an 8.5 percentage point reduction in a shadow economy relative to GDP. The negative effect of intelligence remains intact when controlled for conventional antecedents of a shadow economy.

Suggested Citation

  • Salahodjaev, Raufhon, 2015. "Intelligence and Shadow Economy: a Cross-Country Empirical Assessment," MPRA Paper 61976, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:61976
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    File URL: https://mpra.ub.uni-muenchen.de/61976/1/MPRA_paper_61976.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    intelligence; IQ; institutions; shadow; economy;
    All these keywords.

    JEL classification:

    • I2 - Health, Education, and Welfare - - Education
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development

    NEP fields

    This paper has been announced in the following NEP Reports:

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