Shadow income and other extra-legal practices of population: the scope and dynamics

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Article(UKR)(.pdf)

Authors analyzed the dynamics of the involvement of the economically active population in the informal economy (in various practices and processes, such as corruption, shadow income, tax evasion); the level of involvement in extra-legal practices of bribery, as well as their causes.

The prevalence of these practices suggests that there is a «normalization» of extra-legal practices –bribery, tax evasion, informal payments for services.

It is determined that the socio-economic policy should be aimed at improving minimum social standards, improving the provision system of the state social assistance based on differentiation and addressing, taking into account family income and the income per household member; the formation of the middle class, the eradication of poverty; the introduction of economic incentives for preventing the undervaluation of skilled labor, its low cost (at the majority of public enterprises and organizations), and on the other hand, the introduction of economic levers of regulation of the expenditures related to the extremely high wages in some monopolized industries.

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