Does taking the shadow economy into account matter to measure aggregate efficiency?

We analyze how adding the shadow economy to official output figures affects estimated technical efficiency at the country level. We find that this only slightly affects the ranking of efficiency scores, but increases average efficiency in a sample of 87 to 97 countries, both developed and developing. Our results are robust to the functional form of the production technology and the adjustment of labour to account for years of schooling.

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Year of publication:	2007-10
Authors:	Méon, Pierre-Guillaume ; Schneider, Friedrich ; Weill, Laurent
Institutions:	Centre Emile Bernheim, Solvay Brussels School of Economics and Management
Subject:	shadow economy \| income \| aggregate productivity \| efficiency

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Extent:	application/pdf
Series:	Working Papers CEB.
Type of publication:	Book / Working Paper
Notes:	Published by: Centre Emile Bernheim, Bruxelles The text is part of a series Working papers CEB Number 07-027.RS 16 pages long
Classification:	O11 - Macroeconomic Analyses of Economic Development ; O17 - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements ; O47 - Measurement of Economic Growth; Aggregate Productivity
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005558880