We analyze the determinants of household work contracted in the German shadow economy. The German socio-economic household panel, which enumerates casual domestic employment, is used to estimate the demand for such household work. The regressors include regional wage rates, household income and...

The existence of a broad range of economic activities in the “shadow” of the official economy is nothing fundamentally new. However, there are signs that the shift into the shadow economy has been increasing considerably from the seventies onwards. Whereas growth in the “official”...