Outside the state: The shadow economy and shadow economy labour force

Abstract

This chapter focusses on the shadow economy and on work in the shadow. The most influential factors on the shadow economy are tax policies and state regulation. The size of the shadow economy was decreasing over 1999-2007 from 34?% to 31.2?% for 161 countries (unweighted average). Furthermore, economic opportunities, taxes and regulations, the general situation on the labour market, and unemployment are crucial for an understanding of the dynamics of the shadow labour force. Opposite to the decrease of the shadow economy (value-added figures), the shadow economy labour force increased for most countries over the period 1999-2007.