Measuring the Global Shadow Economy
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Measuring the Global Shadow Economy

The Prevalence of Informal Work and Labour

Colin C. Williams and Friedrich Schneider

This book brings together two leading researchers in the field to provide a comprehensive overview of the shadow economy from a global perspective. Reviewing the advantages and disadvantages of different ways of measuring the informal sector, the authors evaluate its size and key determinants across the world. Williams and Schneider clearly establish the persistence and prevalence of the shadow economy, analysing the narrowness of existing policy approaches and explaining how these fail to address the key factors for its existence and may even exacerbate the problem.
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Chapter 3: Measuring the shadow labour force: a review of direct survey methods

Colin C. Williams and Friedrich Schneider

Extract

Although many use indirect methods to evaluate the size of the shadow economy, an increasing number of scholars are employing direct surveys, not least because there has been a desire to understand the nature of work in the shadow economy, the characteristics of the shadow labour force and motives of participants. Those advocating direct methods criticize the indirect methods for providing very little information regarding the structure of the shadow economy. They argue that indirect methods possess some very crude assumptions concerning its nature that are far from proven (Thomas, 1992; Williams, 2004a; Williams and Windebank, 1998, 1999, 2001, 2003). In previous decades when little empirical data was available, such methods might have played an important role in highlighting the existence of the shadow economy. Today nevertheless, the growing number of direct surveys means that indirect methods are no longer perhaps as necessary as was previously the case (Williams, 2006a).

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