One Share Fits All? Regional Variations in the Extent of the Shadow Economy in Europe

Helmut Herwartz, Egle Tafenau and Friedrich Schneider ()

Regional Studies, 2015, vol. 49, issue 9, 1575-1587

Abstract: H erwartz H., T afenau E. and S chneider F. One share fits all? Regional variations in the extent of the shadow economy in Europe, Regional Studies . A multiple indicators multiple causes (MIMIC) approach with spatial effects is followed to estimate the extent of the shadow economy in the regions of the European Union in 2007 and 2008. The shadow economic sector is smallest in regions of the Netherlands and Denmark and highest in Greece, Poland, Portugal and Romania. In several countries the extent of shadow activities varies markedly across regions, calling for regional diversification of measures against it. Moreover, the eligibility status for structural funding by the European Union changes for some regions if shadow activities are included in the gross domestic product to their full extent.

Date: 2015
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DOI: 10.1080/00343404.2013.848034

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