The Size of Shadow Economy in the EU : A study of Undeclared Work, Bribery and Tax Evasion in 2013

Purpose: The purpose is to investigate the size of the shadow economy within the EU, by studying undeclared work, bribery and tax evasion in 28 Member States in 2013, and answer the question how to better combat shadow economy. Research design: The study is a quantitative research as it uses data from existing surveys and a report. The collected data is analyzed by multiplying the number of respondents with the percentage of the issue in each Member State. Calculating all three issues for 28 Member States presents the size of the shadow economy in the EU in 2013. Findings: Research has found that shadow economy is present within the EU. The study shows that the size of shadow economy in 2013 is 17,6 %. Amongst the three issues, tax evasion was more extensive than the other two issues. Besides regulation, there are other considerable factors that contribute to the gap in the shadow economy. The findings show that EU has taken measures to combat these issues. However, the study finds other measures to be needed to combat shadow economy. Contribution: This study contributes to the research of shadow economy within the EU by focusing on three issues: undeclared work, bribery and tax evasion. The study is supposed to raise awareness to not neglect the issues but rather combat them in a cross-border effort as shadow economy is not only affecting each Member States at national level but also at EU-level