Informal self-employment within the non-observed economy of Israel

Labib Shami, Gil Cohen, Osnat Akirav, Arie Herscovici, Limor Yehuda and Sagit Barel-Shaked

International Journal of Entrepreneurship and Small Business, 2024, vol. 52, issue 2, 159-180

Abstract: This study estimates the size of the non-observed economy, and the share within it that stems from informal economic activity among the self-employed, using a modified currency demand approach adapted to the Israeli economy. By assessing the demand for currency arising from the economic activity of the self-employed, the extent of informal self-employment is estimated as a percentage of GDP. According to the model, the share of the non-observed economy and informal economic activity among the self-employed has been characterised by a downward trend over the last decade. In 2019, the informal economic activity among the self-employed reached nearly NIS 102 billion, 65% of the size of the non-observed economy. The rest stems from illegal activity, which accounts for about NIS 55 billion.

Keywords: informal economy; demand for money; tax evasion; informal labour markets; illegal behaviour. (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijesbu:v:52:y:2024:i:2:p:159-180

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