Shadow Economy Index for Moldova and Romania

Abstract

This report presents estimates of the size of the shadow economy in Moldova and Romania during the years 2015–2016. The estimates are based on surveys of entrepreneurs in both countries, following the method of Putniņš and Sauka (Journal of Comparative Economics 43:471–490, 2015). The components of the shadow economy captured by this approach include misreported business income, unregistered or hidden employees, and ‘envelope’ wages. Our findings suggest that both Moldova and Romania exhibit high levels of bribery, which is influenced by the number of unregistered companies. The results of this chapter highlight the importance of focusing on different forms of entrepreneurship particularly in transition economies.