Shadow Economies Around the World Size, Causes, and Consequences

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

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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

Schneider, Friedrich G. and Enste, Dominik, Shadow Economies Around the World Size, Causes, and Consequences (February 2000). IMF Working Paper, Vol. , pp. 1-57, 2000. Available at SSRN: https://ssrn.com/abstract=879376

Friedrich G. Schneider (Contact Author)

Johannes Kepler University Linz - Department of Economics ( email )

Altenbergerstrasse 69
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)

Poschinger Str. 5
Munich, DE-81679
Germany

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

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Dominik Enste

University of Cologne - Department of Economics ( email )

Cologne, 50923
Germany

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