Intelligence and Shadow Economy: a Cross-Country Empirical Assessment

Raufhon Salahodjaev

MPRA Paper from University Library of Munich, Germany

Abstract: This paper empirically assesses the influence of intelligence on a shadow economy, using data from 158 countries, over the period 1999-2007. The results provide strong evidence for the claim that intelligence is negatively associated with an underground economy. This paper establishes that, on average, a one standard deviation increase in IQ is associated with an 8.5 percentage point reduction in a shadow economy relative to GDP. The negative effect of intelligence remains intact when controlled for conventional antecedents of a shadow economy.

Keywords: intelligence; IQ; institutions; shadow; economy (search for similar items in EconPapers)
JEL-codes: I2 I25 (search for similar items in EconPapers)
Date: 2015-02-04
New Economics Papers: this item is included in nep-iue
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Citations: View citations in EconPapers (41)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:61976

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