Shadow Economy

The shadow economy—also known as the black market, informal economy, black economy, underground economy, or system D—refers to a market [Page 1550]system of labor, goods, and services paid for in cash or kind and not declared for taxation. However, others describe it as the portion of a country’s economy derived from sources outside of its formal rules and regulations regarding commercial activities. These activities may be legal or illegal, depending on how the labor, goods, and services, as well as payment, are processed. For example, on one hand, an individual may perform legal work, such as farm work or carpentry, but receive payment that is not declared to state institutions in charge of labor and tax regulation. In such a case, only the way in ...