The Tax Burden as One of the Conditions Contributing to the Shadow Economy in the Russian Regions

Abstract

The article is devoted to the study of conditions conducive to the growth of the shadow economy in Russian regions. Special attention is paid to assessing the impact of the tax burden on the scale of the shadow economy. The article is devoted to the study of the shadow economy in the Russian regions. The purpose of the study is to identify the characteristics by Russian regions with a high level of the shadow economy. In the study the methods of correlation analysis, factor analysis, and cluster analysis were used. The research revealed an inverse correlation between the amount of shadow employment and the level of the tax burden. In the regions with a low level of tax burden, a significant level of shadow employment is usually observed. There is also an inverse correlation between the value of shadow employment and labor productivity, measured by the value of Gross Regional Product (GRP) per capita. An inverse correlation was found between the scale of the shadow economy and the level of development of innovation processes in the region, which is measured by the number of advanced production technologies used per capita and the level of innovation activity of organizations. The study revealed an inverse correlation between the level of shadow employment and the share of industries in GRP, the correlation coefficient in 2019 was –0.5198. A direct correlation was found between the level of shadow employment and the share of social sectors in GRP, in 2019 the correlation coefficient was 0,5890. The obtained results allowed us to identify the factors that favor the growth of the shadow economy. Among them, the backlog of the regions in economic and innovative development comes to the fore. The research findings can be used by the state authorities for developing regional economic policies aimed to reduce the scale of the shadow economy.