shadow economy
Off-the-books commerce
A shadow economy is economic activity that operates outside government oversight, taxation, and official statistics.
This includes both illegal enterprises like drug trafficking and legal work performed off the books, such as paying a contractor in cash to avoid taxes.
Also called the underground economy, black market, or informal economy, it exists in every country but tends to be larger where regulation is burdensome or enforcement weak.
The shadow economy may account for a significant portion of GDP in developing nations.
Unauthorized but legal trade
- unlicensedWithout official permit
- unregisteredNot formally recorded
- undocumented workersLaborers without legal authorization
- unmonitoredNot under observation
noncompliant · extralegal · unaudited · unrecorded · unofficial · zoning violation · unbanked
Unrecorded for tax purposes
- moonlightingCovert additional employment
- side hustleSecondary income venture
- unreported incomeMoney not disclosed officially
- day laborerCasual hired worker
gig work · street vendor · cash-in-hand · under the table · odd jobs · domestic work · nanny · housekeeper
Illegal covert transport
- money launderingDisguising criminal proceeds' origins
- traffickingIllegal transport for profit
- counterfeitingMaking fake money
- racketeeringConducting illegal business schemes
fraud · embezzlement · extortion · forgery · bootlegging · fencing · bribery · corruption
Legal payment minimization
- tax evasionIllegally avoiding government dues
- offshore accountsBank deposits in other countries
- hidden incomeEarnings concealed from authorities
- auditFormal accounts examination
gray market
Unauthorized but legal trade
- unlicensedWithout official permit
- unregisteredNot formally recorded
- undocumented workersLaborers without legal authorization
unmonitored · noncompliant · extralegal · unaudited · unrecorded · unofficial · zoning violation · unbanked
off-the-books
Unrecorded for tax purposes
- moonlightingCovert additional employment
- side hustleSecondary income venture
- unreported incomeMoney not disclosed officially
day laborer · gig work · street vendor · cash-in-hand · under the table · odd jobs · domestic work · nanny · housekeeper · handyman
smuggling
Illegal covert transport
- money launderingDisguising criminal proceeds' origins
- traffickingIllegal transport for profit
- counterfeitingMaking fake money
racketeering · fraud · embezzlement · extortion · forgery · bootlegging · fencing · bribery · corruption · cartel
tax avoidance
Legal payment minimization
- tax evasionIllegally avoiding government dues
- offshore accountsBank deposits in other countries
- hidden incomeEarnings concealed from authorities
- informal economiesbarter, bartering, swap, trade networks, barter systems
- transition economicsshock therapy, market reform, privatization, vouchers, hyperinflation
- underground economyblack market, cash in hand, off the books, under the table, unreported income
- immigrationimmigrant, immigrants, visa, refugee, citizenship
- economic problemsmarket failure, recession, inflation, deflation, stagflation
- tax crimestax fraud, tax evasion, undeclared income, unreported income, hidden income