Shadow Economies and Corruption All Over the World - Index of - IZA

Table 2.6: Values/Attitudes of the German population regarding shadow economy
Statements
Statement
Without shadow economy earnings one cannot
keep up the standard of living
It‘s the state/government own fault that the
shadow economy is so popular and large, because
the tax and social security burden is too high
In the last 2-3 years I have demanded shadow
economy activities
Due to shadow economy activities the state
looses a great amount of tax revenues and social
security payments
In the neighbourhood one observes a lot of
shadow economy activities
I think, shadow economy workers should be
reported to the authorities and prosecuted
If a shadow economy worker is detected he
should be punished severely (high financial fines)
Source: Schneider (2004)
May
1996
German Population (in % Yes)
May
1998
2.2.5 Summary of the Main Causes of the Shadow Economy
May
2001
Nov./Dec.
2002
Nov./Dec.
2003
62 69 69 70 71
63 67 57 66 67
26 38 34 36 39
29 25 30 28 26
- - 24 28 32
9 4 6 3 3
7 4 5 7 3
In table 2.7 an overview of a number of empirical studies is given which summarizes the
empirical results of the various factors influencing the shadow economy. In table 2.7 we have
to two columns, showing the various factors influencing the shadow economy with and
without the independent variable, “tax moral”. This table clearly demonstrates that the
increase of the tax and social security contribution burdens is by far most important single
influence of the increase of the shadow economy. This factor does “explain” between 35 -
38% or 45 - 52% of the variance of the shadow economy with and without including the
variable “tax moral”, then follows the variable tax moral which “explains” between 22 – 25%
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