The Shadow Economy and Shadow Labor Force: A Survey of Recent Developments

68 Pages Posted: 5 Jul 2014

See all articles by Friedrich Schneider

Friedrich Schneider

Johannes Kepler University Linz - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Institute for the Study of Labor (IZA)

Abstract

This survey presents the various methods to estimate the size of the shadow economy, their strengths and weaknesses and the estimation results. The purpose of the survey is threefold. Firstly, it demonstrates that no ideal method to estimate the size and development of the shadow economy exists. Because of its flexibility, the MIMIC method used to get macro-estimates of the size of the shadow economy is discussed in greater detail. Secondly, the paper focuses on the definition and causal factors of the shadow economy as well as on a comparison of the size of the shadow economy using different estimation methods. Thirdly, estimations of the size of the shadow economy and shadow labor force are presented and discussed.

Keywords: shadow economy estimates, shadow labor force, MIMIC approach, methods to estimate the shadow economy, advantages and disadvantages of the measurement methods, shadow labor force and unemployment, micro studies on shadow labor force

JEL Classification: D78, E26, H2, H11, H26, K42, O5, O17

Suggested Citation

Schneider, Friedrich G., The Shadow Economy and Shadow Labor Force: A Survey of Recent Developments. IZA Discussion Paper No. 8278, Available at SSRN: https://ssrn.com/abstract=2462710

Friedrich G. Schneider (Contact Author)

Johannes Kepler University Linz - Department of Economics ( email )

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A-4040 Linz, 4040
Austria
+43 732 2468 8210 (Phone)
+43 732 2468 8208 (Fax)

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

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Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Institute for the Study of Labor (IZA)

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Bonn, D-53072
Germany

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