Semester I 1998/99
Submitted by:Don Lydon Final B.Comm
It is widely accepted that an extensive and substantial black economy is at work in the Irish economy. Reports in the media regularily feature cases of tax evasion, social welfare fraud and illegal economic activites which generate huge sums of unrecorded income. The Irish black economy is officially estimated to account for 3% of G.D.P which is equivalant to £1000m IR pounds. However the official statistics only refer to legal activities that are undeclared so it is clear from the outset that the figure is grossly inaccurate. Recent estimates of the black economy put the true figure closer to £350m Ir pounds. However it must be stressed that these estimates are highly tentative. Measuring the black economy can only be carried out by indirect means given the desire of participants to conceal their activities.
That said it is obvious that the black economy is a significant sector of the irish economy. In this paper i will consider the various methods used for evaluating the size of the black economy and examine some recent economic estimates.