This paper empirically examines whether devoting more resources to education can reduce the size of the shadow economy on a cross-section of countries. The findings show a negative relationship between public education expenditure and the size of the shadow economy, which is robust to the inclusion of different proxies for the control variables, a large set of policy variables, regional differences and endogeneity. The findings also emphasize the role of education, suggesting that public policies devoted to higher education level imply a decreasing effect on the shadow economy.
|Number of pages||20|
|Journal||International Economic Journal|
|Publication status||Published - 2015|
All Science Journal Classification (ASJC) codes
- General Economics,Econometrics and Finance