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The Shadow Economy and Work in the Shadow: What Do We (Not) Know?

by Schneider, F.
Series: Discussion Paper Series Edition statement:IZA DP No. 6423 Published by : Johannes Kepler University of Linz and IZA (Germany) Physical details: 73p. Year: 2012
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In this paper the main focus lies on the shadow economy and on work in the shadow in OECD, developing and transition countries. Besides informal employment in the rural and
non-rural sector also other measures of informal employment like the share of employees not covered by social security, own account workers or unpaid family workers are shown. The most influential factors on the shadow economy and/or shadow labor force are tax policies
and state regulation, which, if they rise, increase both. Furthermore the discussion of the recent micro studies underline that economic opportunities, the overall burden of the state
(taxes and regulations), the general situation on the labor market, and unemployment are crucial for an understanding of the dynamics of the shadow economy and especially the
shadow labor force.

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