Shadow Economies Around the World: Size, Causes, and Consequences

Author/Editor:

Friedrich Schneider ; Dominik Enste

Publication Date:

January 1, 2000

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

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.

Series:

Working Paper No. 2000/026

Subject:

Currencies Informal economy Labor Marginal effective tax rate Tax incidence

English

Publication Date:

January 1, 2000

ISBN/ISSN:

9781451844375/1018-5941

Stock No:

WPIEA0262000

Pages:

56

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