Size and Development of the Shadow Economies of 157 Countries Worldwide: Updated and New Measures from 1999 to 2013

Mai Hassan () and Friedrich Schneider ()
Additional contact information
Mai Hassan: University of Marburg

No 10281, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper is a first attempt to study the size and development of the shadow economies of 157 countries over 1999 to 2013. Using a MIMIC model, we find that higher tax and regulatory burden, unemployment and self-employment rates are drivers of the shadow economy, meaning that an increase of these causal variables increases the shadow economy. Our result also confirms previous findings of Friedrich Schneider, Andreas Buehn and Claudia Montenegro (2010). The estimated average of informality of 157 countries around the world, including developing, eastern European, central Asian and high income OECD countries averaged over 1999 to 2013 is 33.77% of official GDP. A critical discussion about the size of these macro-estimates comes to the conclusion that most likely the "true" shadow economy of these countries is only 69% of their estimated macro-MIMIC-values.

Keywords: shadow economies of 157 countries; quality of institutions; tax and regulatory burden; MIMIC model (search for similar items in EconPapers)
JEL-codes: C51 C82 E26 E41 H11 H26 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2016-10
New Economics Papers: this item is included in nep-iue and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (81)

Downloads: (external link)
https://docs.iza.org/dp10281.pdf (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: https://EconPapers.repec.org/RePEc:iza:izadps:dp10281

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().