The paper tries to shed some light on the definition of the shadow economy, in order to separate shadow activities from market activities and household production. A total income concept is applied, which is based on the labor force being engaged in market, shadow and household activities. Based...

The paper is based on an individual life-cycle model, which describes the purely economic components of human capital. The present value of human capital is determined by all future income flows, which at the same time constitute the individual as well as the total tax base of a nation....