Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/183248
Authors: 
Schneider, Friedrich
Medina, Leandro
Year of Publication: 
2017
Series/Report no.: 
Working Paper 1710
Abstract: 
This paper is a first attempt to estimate the size and development of the shadow economy of 158 countries over the period 1991 up to 2015. Using the Multiple Indicators, Multiple Causes (MIMIC) method we apply for the first time (i) the light intensity approach instead of GDP avoiding the problem that quite often GDP is used as a cause and indicator variable, (ii) the Predictive Mean Matching (PMM) method, and (iii) a variety of robustness tests. Results suggest that the average size of the shadow economy of these 158 countries over 1991-2015 is 32.5% of official GDP, which was 34.82% in 1991 and decreased to 30.66% in 2015. The lowest size of the shadow economy East Asian countries with 16.77% averaged over the period 1991- 2015, then follows OECD countries with 18.7% and the highest value have Latin American and sub-Saharan African countries with values above 35%.
Subjects: 
Shadow economies of 158 countries
MIMIC estimations
the light intensity approach
tax burden
regulation
trade openness
corruption
JEL: 
C39
C51
C82
H11
H26
U17
Document Type: 
Working Paper

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