Shadow Labor Market Analysis Within Computable General Equilibrium Model of Ukrainian Economy

Andriy Olegovych Shkurykhin, National Univesity of Kyiv-Mohyla Academy

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In pursuit of creating the tool for policy analysis accounting for existence of Ukrainian shadow economy, the shadow untaxed labor market is integrated into the aggregated static Computable General Equilibrium model. The developed model is successfully calibrated to official statistical data and proven suitable for further analysis. The efficiency of the 2016 social security tax reform is assessed and proven to be more dependent on the preferences between the formal and informal labor of the factor owner than on the magnitude of the tax cut. The importance of the preferences of both the manufacturer and the consumer, being represented as the elasticities of transformation and substitution between the formal and the informal labor in the model, is discovered. Based on treating these elasticities as instrumental variables, policy recommendations are developed.



shadow labor market; computable general equilibrium; elasticity of substitution; elasticity of transformation; social security tax.

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Cite this article in APA format:

Shkurykhin, A. (2016). Shadow Labor Market Analysis Within Computable General Equilibrium Model of Ukrainian Economy. Scientific Papers NaUKMA. Economics, 1(1), 172-176.

Cite this article in GOST format:

Shkurykhin Andriy. Shadow Labor Market Analysis Within Computable General Equilibrium Model of Ukrainian Economy // Scientific Papers NaUKMA. Economics. - 2016. - Vol. 1, N. 1. - P. 172-176.



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