We use an “unexplained demand for cash” approach to measure the size of the shadow economy in Sweden. The size of the shadow economy is found to have increased from 3.8 to 6.5 per cent of GDP from 1990 to 2004. This result is also supported by our finding of an increased residual between...

The income of the self-employed is often assumed to be understated in economic statistics. Controversy exists about the best method for estimating the extent of under-reporting and about the resulting measures of the size of the underground economy. This paper refines a method developed by...

Income under-reporting estimates based on households data as well as the size of the shadow economy are of interest to academics as well as policy makers. For that purpose, various methods have been developed using micro/survey data as well as aggregate/macro data. This study applies the micro...