Shadow Economies in highly developed OECD countries: What are the driving forces?

Andreas Buehn and Friedrich Schneider ()

No 2013-17, Economics working papers from Department of Economics, Johannes Kepler University Linz, Austria

Abstract: The main focus of this paper lies on the “driving forces” of the development and size of the shadow economy in 39 highly developed OECD countries. The most influential factors on the shadow economy are tax policies and state regulation, which, if rising, increase the shadow economy, though other, economic factors like unemployment are important, too. Specifically, it is shown that the main driving forces of the size and development of the shadow economy are unemployment, self-employment and the tax burden, which impact the shadow economies in these 30 OECD countries to a different degree. Between 1999 and 2010 unemployment and self-employment have on average the largest relative impact (14.6%), followed by tax morale (14.5%), GDP growth (14.3%), business freedom (14.2%) and indirect taxes (14.1%).

Keywords: Shadow economy; tax morale; tax pressure; state regulation; undeclared work (search for similar items in EconPapers)
JEL-codes: D78 H26 K42 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2013-08
New Economics Papers: this item is included in nep-acc, nep-iue, nep-law and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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Related works:
Working Paper: Shadow Economies in Highly Developed OECD Countries: What Are the Driving Forces? (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:jku:econwp:2013_17

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