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Shadow Economy in Slovenia: The Labour Approach

Author

Listed:
  • Bojan Nastav

    (University of Primorska, Slovenia)

  • Stefan Bojnec

    (University of Primorska, Slovenia)

Abstract

The all-around notorious shadow economy phenomenon is subject to constant reshaping, regarding both time and place, which results in a somewhat unclear definition. We use the following definition: all productive activities, whose output is legal, but is deliberately concealed from the authorities, usually for gaining financial benefits. Different methods of quantifying the size of the shadow economy have been developed. We focus on the labour approach, with Slovenia as the case study during the last decade. The importance of such an analysis lies in the ambiguous effects of the shadow economy and their policy implications. We found that the shadow economy that relates only to the unemployment discrepancies in Slovenia amounts on average to around 6 percent of the official economy, and tends to slightly decline over the most recent years. On the other hand, employment discrepancy and more detailed activity-level results give much higher values and even an increase in the shadow economy: on average around 20 percent in the studied period.

Suggested Citation

  • Bojan Nastav & Stefan Bojnec, 2007. "Shadow Economy in Slovenia: The Labour Approach," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 5(2), pages 193-208.
    • Handle: RePEc:mgt:youmgt:v:5:y:2007:i:2:p:193-208
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    File URL: http://www.fm-kp.si/zalozba/ISSN/1581-6311/5_193-208.pdf
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    References listed on IDEAS

    as
    1. Friedrich Schneider, 2003. "The Development of the Shadow Economies and Shadow Labour Force of 21 OECD and 22 Transition Countries," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 1(01), pages 17-23, February.
    2. Edgar L. Feige & Ivica Urban, 2003. "Estimating the Size and Growth of Unrecorded Economic Activity in Transition Countries: A Re-evaluation of Electric Consumption Method Estimates and their Implications," Macroeconomics 0311010, University Library of Munich, Germany.
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    4. Feige, Edgar L., 1990. "Defining and estimating underground and informal economies: The new institutional economics approach," World Development, Elsevier, vol. 18(7), pages 989-1002, July.
    5. Kaufmann, Daniel & Kaliberda, Aleksander, 1996. "Integrating the unofficial economy into the dynamics of post-socialist economies : a framework of analysis and evidence," Policy Research Working Paper Series 1691, The World Bank.
    6. Arne Jon Isachsen & Steiner Strøm, 1985. "The Size And Growth Of The Hidden Economy In Norway," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 31(1), pages 21-38, March.
    7. Friedrich Schneider, 2003. "The Development of the Shadow Economies and Shadow Labour Force of 21 OECD and 22 Transition Countries," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 1(1), pages 17-23, 02.
    8. Trevor Breusch, 2005. "Estimating the Underground Economy using MIMIC Models," Econometrics 0507003, University Library of Munich, Germany, revised 15 Dec 2005.
    9. Bojan Nastav & Å tefan Bojnec, 2007. "The Shadow Economy in Bosnia and Herzegovina, Croatia, and Slovenia: The Labor Approach," Eastern European Economics, Taylor & Francis Journals, vol. 45(1), pages 29-58, February.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Josip Franic, 2019. "Undeclared Economy in Croatia during the 2004–2017 Period: Quarterly Estimates Using the MIMIC Method," Croatian Economic Survey, The Institute of Economics, Zagreb, vol. 21(1), pages 5-46, June.
    2. Péter Elek & János Köllő, 2019. "Eliciting permanent and transitory undeclared work from matched administrative and survey data," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 46(3), pages 547-576, August.
    3. Adriana AnaMaria DAVIDESCU (ALEXANDRU), 2014. "Estimating The Size Of Romanian Shadow Economy. A Labour Approach," Journal of Social and Economic Statistics, Bucharest University of Economic Studies, vol. 3(1), pages 25-37, JULY.
    4. Jože Kocjancic & Stefan Bojnec, 2011. "Analisys of the Shadow Economy in the Wood Industry," MIC 2011: Managing Sustainability? Proceedings of the 12th International Conference, Portorož, 23–26 November 2011 [Selected Papers],, University of Primorska, Faculty of Management Koper.
    5. Mohammad Javad Razmi & Arash Jamalmanesh, 2014. "How Political Indices Affect The Shadow Economy," Romanian Economic Business Review, Romanian-American University, vol. 9(1), pages 45-55, March.
    6. Helmut Herwartz & Friedrich Schneider & Egle Tafenau, 2011. "Regional Patterns of the Shadow Economy: Modelling Issues and Evidence from the European Union," Chapters, in: Friedrich Schneider (ed.), Handbook on the Shadow Economy, chapter 6, Edward Elgar Publishing.
    7. Wei Han, 2020. "The analysis on Chinese e-commerce tax losses based on the perspective of information asymmetry," Electronic Commerce Research, Springer, vol. 20(3), pages 651-677, September.
    8. Søndergaard, J., 2023. "Undeclared Danish Labor: Using the labor input method with linked individual-level tax data to estimate undeclared work in Denmark," Journal of Economic Behavior & Organization, Elsevier, vol. 214(C), pages 708-730.

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    More about this item

    Keywords

    shadow economy; indirect methods; employment discrepancies; labour approach;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy

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