An Empirical Estimation of the Underground Economy in Ghana

Table 2

Main causes of the increase of the shadow economy.

Factors influencing the shadow economy
The most important driving forces are	Influence on the shadow economy (in%)^1
(1) Increase of the tax and social Security contribution burdens	35–38%	45–52%
(2) Intensity of state regulations	8–10%	10–15%
(3) Social transfers	5–7%	5–8%
(4) Specific labor market regulations	5–7%	5–8%
(5) Public sector services	5–7%	5–8%
(6) Tax morale^2	22–25%	—
Overall influence	76–94%	70–90%

1Average values of empirical results of 28 studies.
²Average values of “only” 15 studies.
Source: Schneider, 2006 [16].