Regional Estimates of the Shadow Economy in Europe

Egle Tafenau · Helmut Herwartz · Friedrich Georg SCHNEIDER

90 citations0/0 files storedInternational Economic Journal

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Taxation and Compliance Studies Economic and Fiscal Studies Crime, Illicit Activities, and Governance

Abstract

The aim of the paper is to estimate the extent of the shadow economy in the regions of the European Union. For this purpose the multiple-indicators multiple-causes approach combined with elements of spatial econometrics is implemented. The analysis shows that the shadow economy is most extensive in Eastern and Southern Europe, confirming results from previous literature. Within countries, the poorest regions tend to exhibit the highest shadow economy quotas. The smallest extent of shadow activities is obtained for the Netherlands and the United Kingdom, while in Poland the shadow economy is most extensive.

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References

1989Structural Equations with Latent Variables 1991Structural Equations with Latent Variables.2000Shadow Economies: Size, Causes, and Consequences 2007Shadow Economies and Corruption All Over the World: Revised Estimates for 120 Countries 2009Survey on the Shadow Economy and Undeclared Earnings in OECD Countries 2020Economics: The Open-Access, Open-Assessment E-Journal 2006The shadow economy in three Mediterranean countries: France, Spain and Greece. A MIMIC approach

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