Selected Issues Papers

Recent Trends of Informality in Greece: Evidence from Subnational Data

Author/Editor:

Larry Q Cui ; Jiaxiong Yao

Publication Date:

February 20, 2024

Electronic Access:

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Summary:

This paper explores the evolution of informality in Greece as it is widely considered one of the major structural impediments to fiscal capacity and sustainable growth. It finds that informality has dropped significantly in Greece in recent years, although there were temporary increases during the sovereign debt crisis and the COVID-19 pandemic. Lower informality is also found to be associated with higher subsequent per capita GDP growth and higher tax revenue. Moreover, Greece’s significant recent progress in digitalization appears to have helped reduce informality. There remains scope to further reduce informality by accelerating digitalization and the ongoing pro-growth structural reforms.

Series:

Selected Issues Paper No. 2024/009

Subject:

Digitalization Economic sectors Informal economy International organization Labor Monetary policy Public employment Revenue administration Tax evasion Technology

Frequency:

Regular