Does Income Inequality Increase the Shadow Economy? Empirical Evidence from Uganda

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dc.contributor.authorEsaku, Stephen
dc.date.accessioned2022-08-31T16:41:30Z
dc.date.available2022-08-31T16:41:30Z
dc.date.issued2021
dc.description.abstractThis paper applies the autoregressive distributed lag bounds testing method to investigate the long- and short-run relationship between the size of the shadow economy and income inequality in Uganda. The findings reveal evidence of the long and short-run relationship between the shadow economy and income inequality. We find that a rise in income inequality significantly increases the size of the shadow economy in Uganda, all else equal. These results are robust to the use of alternative econometric methods. At the policy level, instituting income redistribution policies to uplift the standard of the poor, improving resource allocation to productive sectors of the economy, reforming the tax system and macroeconomic environment, and implementing political and institutional reforms to address corruption could be viable policy options to address informality in Uganda.en_US
dc.identifier.citationEsaku, S. (2021). Does income inequality increase the shadow economy? Empirical evidence from Uganda. Development Studies Research, 8(1), 147-160.https://doi.org/10.1080/21665095.2021.1939082en_US
dc.identifier.urihttps://nru.uncst.go.ug/handle/123456789/4505
dc.language.isoenen_US
dc.publisherDevelopment Studies Researchen_US
dc.subjectIncome distribution; informal sector; income inequality; government spending; shadow economy; taxationen_US
dc.titleDoes Income Inequality Increase the Shadow Economy? Empirical Evidence from Ugandaen_US
dc.typeArticleen_US
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