A Review of the Informal Economy Driving Forces and Policy Measures against it: An Analysis of Six EU Countries Article Swipe

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YOU? · · 2023 · Open Access · · DOI: https://doi.org/10.21203/rs.3.rs-3188455/v1

This study provides estimates of the size and development of the shadow economy in the countries of the European Union (EU) plus the United Kingdom from 2003 to 2022 using a MIMIC approach. The focus of the study is to provide an analysis of the main factors that drive economic agents to enter shadow economy activities. Our results show that the size of the shadow economy has declined markedly between 2003 and 2021 for almost all countries of the EU including the UK. Our results indicate that the average size of the shadow economy in 27 EU countries plus the UK has decreased from 22.6% of GDP in 2003 to 17.3% in 2022. However, our results also reveal that the size of the shadow economy increased slightly in most EU countries as a result of the direct or indirect impact of the Coronavirus pandemic from 2020 onward. Our analysis and results reveal that weak institutional quality, ineffective government institutions, complex and burdensome tax and regulatory systems, the lack of strong legal systems, and pervasive corruption are the main determinants of economic informality in most countries of the EU. Moreover, the study reviews and elaborates on the main driving forces and the policy measures implemented to reduce the shadow economy with an exclusive focus on six EU countries (Germany, Austria, Denmark, Greece, Italy and Romania). JEL Classification : O5, C39, C51, C82, H11, H26, U17.

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Shadow (psychology) European union Language change Economy Government (linguistics) Informal sector Eu countries Economics Business International economics Market economy Literature Art Psychotherapist Psychology Philosophy Linguistics

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Type: review
Language: en
Landing Page: https://doi.org/10.21203/rs.3.rs-3188455/v1
PDF: https://www.researchsquare.com/article/rs-3188455/latest.pdf
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Cited By: 1
References: 27
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DOI: https://doi.org/10.21203/rs.3.rs-3188455/v1

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Title: A Review of the Informal Economy Driving Forces and Policy Measures against it: An Analysis of Six EU Countries

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Language: en

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Publication year: 2023

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Publication date: 2023-07-26

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Authors: Friedrich Schneider, Alban Asllani

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Landing page: https://doi.org/10.21203/rs.3.rs-3188455/v1

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Concepts: Shadow (psychology), European union, Language change, Economy, Government (linguistics), Informal sector, Eu countries, Economics, Business, International economics, Market economy, Literature, Art, Psychotherapist, Psychology, Philosophy, Linguistics

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abstract_inverted_index.increased	126
abstract_inverted_index.pervasive	174
abstract_inverted_index.burdensome	162
abstract_inverted_index.corruption	175
abstract_inverted_index.elaborates	194
abstract_inverted_index.government	158
abstract_inverted_index.regulatory	165
abstract_inverted_index.Coronavirus	143
abstract_inverted_index.activities.	56
abstract_inverted_index.development	9
abstract_inverted_index.implemented	204
abstract_inverted_index.ineffective	157
abstract_inverted_index.informality	182
abstract_inverted_index.determinants	179
abstract_inverted_index.institutional	155
abstract_inverted_index.institutions,	159
abstract_inverted_index.Classification	226
cited_by_percentile_year.max	94
cited_by_percentile_year.min	90
countries_distinct_count	2
institutions_distinct_count	2
sustainable_development_goals[0].id	https://metadata.un.org/sdg/16
sustainable_development_goals[0].score	0.6800000071525574
sustainable_development_goals[0].display_name	Peace, Justice and strong institutions
citation_normalized_percentile.value	0.79255703
citation_normalized_percentile.is_in_top_1_percent	False
citation_normalized_percentile.is_in_top_10_percent	False