Méon, Pierre-Guillaume Schneider, Friedrich G. Weill, Laurent Dreher, Axel
Year of Publication:
Working Paper No. 0609
We analyze how adding the shadow economy to official output figures affects technical efficiency. We find that this only slightly affects the ranking of efficiency scores, but increases average efficiency. Our results are robust to the functional form of the production technology and the adjustment of labor to account for years of schooling.
shadow economy income aggregate productivity efficiency