The Shadow Economy in Germany - A Blessing or a Curse for the Official Economy?

Friedrich Georg Schneider ()

Economic Analysis and Policy (EAP), 2008, vol. 38, issue 1, pages 89-111

Abstract: This article provides an estimation of the size and development of the shadow economy of Germany, using various estimation procedures. The shadow economy is defined as market-bound production of goods and services which escape detection in the official estimates of GDP. An increased burden of taxation and social security payments, combined with intensive labour market regulation, insufficient quality of state institutions and low tax morale are the driving forces for the shadow economy. Moreover, the results of recent surveys for Germany demonstrate that the readiness to undertake illicit employment as well as its acceptance is high in Germany and other countries. Finally, conclusions are made about the effect of the shadow economy on the official one and incentive-oriented policy means are presented, so that the ‘black’ value added can be transformed into the official value added.

Keywords: shadow economy; inofficial economy; black market (search for similar items in EconPapers)
JEL-codes: O17 O5 D78 H2 H26 (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://eap-journal.com/download.php?file=662 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:eap:articl:v:38:y:2008:i:1:p:89-111

Access Statistics for this article

More articles in Economic Analysis and Policy (EAP) from Queensland University of Technology (QUT), School of Economics and Finance
Contact information at EDIRC.
Series data maintained by Manuela Torgler ().