Shadow Economy Index for Moldova and Romania 2015-2016

54 Pages Posted: 15 May 2018

See all articles by Tālis J. Putniņš

Tālis J. Putniņš

University of Technology Sydney (UTS); Stockholm School of Economics, Riga

Arnis Sauka

Stockholm School of Economics, Riga

Adriana AnaMaria Davidescu

Bucharest University of Economic Studies

Date Written: May 1, 2018

Abstract

This report presents estimates of the size of the shadow economy in Moldova and Romania during the years 2015-2016. The estimates are based on surveys of entrepreneurs in both countries, following the method of Putniņš and Sauka (2015). The components of the shadow economy captured by this approach include misreported business income, unregistered or hidden employees, and ‘envelope’ wages. Our estimates indicate that the size of the shadow economy in Moldova and Romania was approximately 29.7% and 33.3% of GDP in 2016, respectively. In both countries the estimated size of the shadow economy decreased in 2016 compared to 2015: in Moldova only slightly (0.1%) and in Romania by 2.3%. The contraction is mainly driven by a small decrease in underreporting of business income, which is the largest component of the shadow economy in both economies.

Keywords: Shadow Economy, Moldova, Romania, Poland, Baltic States

Suggested Citation

Putnins, Talis J. and Sauka, Arnis and Davidescu, Adriana AnaMaria, Shadow Economy Index for Moldova and Romania 2015-2016 (May 1, 2018). Available at SSRN: https://ssrn.com/abstract=3171741 or http://dx.doi.org/10.2139/ssrn.3171741

Talis J. Putnins

University of Technology Sydney (UTS) ( email )

PO Box 123
Broadway
Sydney
Australia
+61 2 9514 3088 (Phone)

Stockholm School of Economics, Riga ( email )

Strelnieku iela 4a
Riga, LV 1010
Latvia
+371 67015841 (Phone)

Arnis Sauka (Contact Author)

Stockholm School of Economics, Riga ( email )

Strelnieku iela 4a
Riga, LV 1010
Latvia

Adriana AnaMaria Davidescu

Bucharest University of Economic Studies ( email )

Tache Ionescu street, no. 11, sector 1
Bucharest
Romania

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