Arbeitspapier
Nonlinearity between the Shadow Economy and Level of Development
This paper is the first attempt to directly explore the long-run nonlinearity of the shadow economy. Using a dataset of 158 countries over the period from 1996 to 2015, our results reveal a robust U-shaped relationship between the shadow economy size and GDP per capita. Our results imply that the shadow economy tends to increase when economic development surpasses a given threshold or at least does not disappear with economic growth. Our findings suggest that special attention should be given to the country's level of development when designing policies to tackle issues related to the shadow economy.
- Language
-
Englisch
- Bibliographic citation
-
Series: IZA Discussion Papers ; No. 12385
- Classification
-
Wirtschaft
Informal Economy; Underground Economy
Tax Evasion and Avoidance
Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
Institutions and Growth
Education and Economic Development
- Subject
-
shadow economy
level of development
nonlinearity
GDP per capita
- Event
-
Geistige Schöpfung
- (who)
-
Wu, Dong Frank
Schneider, Friedrich
- Event
-
Veröffentlichung
- (who)
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Institute of Labor Economics (IZA)
- (where)
-
Bonn
- (when)
-
2019
- Handle
- Last update
- 10.03.2025, 11:43 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Wu, Dong Frank
- Schneider, Friedrich
- Institute of Labor Economics (IZA)
Time of origin
- 2019
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