Shadow Economies Around the World Size, Causes, and Consequences

Schneider, Friedrich; Enste, Dominik

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Shadow Economies Around the World Size, Causes, and Consequences

IMF Working Paper No. 00/26

57 Pages Posted: 30 Jan 2006

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)

Dominik Enste

University of Cologne - Department of Economics

There are 2 versions of this paper

Date Written: February 2000

Abstract

This paper presents estimates of the size of the shadow economy in 76 developing, transition, and OECD countries, which are derived by combining figures from different estimation methods. We describe and discuss the strengths and weaknesses of the different estimation methods. We find that the growth of the shadow economy which is now remarkably large in the 76 countries is strongly related to increasing burdens of taxation and social security contributions, as well as to the extent of state regulatory activities. Rising corruption also has a clearly positive impact on the growth of the shadow economy.

JEL Classification: 017, 05, D78, H2, H26

Suggested Citation: Suggested Citation

Schneider, Friedrich G. and Enste, Dominik, Shadow Economies Around the World Size, Causes, and Consequences (February 2000). IMF Working Paper No. 00/26, Available at SSRN: https://ssrn.com/abstract=879376