Munich Personal RePEc Archive

Intelligence and Shadow Economy: a Cross-Country Empirical Assessment

Salahodjaev, Raufhon (2015): Intelligence and Shadow Economy: a Cross-Country Empirical Assessment. Published in: Intelligence , Vol. 49, (2015): pp. 129-133.

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This paper empirically assesses the influence of intelligence on a shadow economy, using data from 158 countries, over the period 1999-2007. The results provide strong evidence for the claim that intelligence is negatively associated with an underground economy. This paper establishes that, on average, a one standard deviation increase in IQ is associated with an 8.5 percentage point reduction in a shadow economy relative to GDP. The negative effect of intelligence remains intact when controlled for conventional antecedents of a shadow economy.

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