Does taking the shadow economy into account matter when measuring aggregate efficiency?

Pierre-Guillaume Méon, Laurent Weill and Friedrich Schneider ()

ULB Institutional Repository from ULB -- Universite Libre de Bruxelles

Abstract: We analyze how adding the shadow economy to official output figures affects estimated technical efficiency at the country level. We find that this only slightly affects the ranking of efficiency scores, but increases average efficiency in a sample of 87 to 97 countries, both developed and developing. Our results are robust to the functional form of the production technology and the adjustment of labour to account for years of schooling.

Keywords: shadow economy; income; aggregate productivity; efficiency. (search for similar items in EconPapers)
Date: 2011-07
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Citations: View citations in EconPapers (10)

Published in: Applied economics (2011) v.43 n° 18,p.2303-2311

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Journal Article: Does taking the shadow economy into account matter when measuring aggregate efficiency? (2011)
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