Recent Trends of Informality in Greece: Evidence from Subnational Data

This paper explores the evolution of informality in Greece as it is widely considered one of the major structural impediments to fiscal capacity and sustainable growth.
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Volume/Issue: Volume 2024 Issue 009
Publication date: February 2024
ISBN: 9798400267741
$15.00
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Topics covered in this book

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Labor , Money and Monetary Policy , Public Finance , Taxation - General , International - Economics , Greece , informality , MIMIC model , subnational , Subnational data , trends of Informality , tax revenue loss , evolution of Informality , informality trend , Informal economy , Digitalization , Public employment , Tax evasion

Summary

This paper explores the evolution of informality in Greece as it is widely considered one of the major structural impediments to fiscal capacity and sustainable growth. It finds that informality has dropped significantly in Greece in recent years, although there were temporary increases during the sovereign debt crisis and the COVID-19 pandemic. Lower informality is also found to be associated with higher subsequent per capita GDP growth and higher tax revenue. Moreover, Greece’s significant recent progress in digitalization appears to have helped reduce informality. There remains scope to further reduce informality by accelerating digitalization and the ongoing pro-growth structural reforms.