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 and regional differences. The findings also suggest that an increase in educational attainment can reduce the size of the shadow economy.
Berrittella, M (26-27 settembre 2013).CAN PUBLIC EDUCATION EXPENDITURE REDUCE THE SHADOW ECONOMY?.
CAN PUBLIC EDUCATION EXPENDITURE REDUCE THE SHADOW ECONOMY?
BERRITTELLA, Maria
Abstract
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 and regional differences. The findings also suggest that an increase in educational attainment can reduce the size of the shadow economy.
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