ANALYSIS OF THE MAIN DETERMINANTS OF THE SHADOW ECONOMY BASED ON SELECTED COUNTRIES OF CENTRAL ASIA

Abstract

This article focuses on assessing the determinants of the shadow economy in Kazakhstan, Kyrgyzstan, and Uzbekistan from 2010 to 2020. Examining the experience of these countries reveals the full range of problems associated with the shadow economy and its impact on economic growth. One of the objectives of the article was to examine the causes of the shadow economy and highlight the highest-income but most vulnerable sectors of the economy. Three Central Asian countries were selected to determine the importance of some factors on the shadow economy in developing countries. To assess the importance of the factors, data for these countries were collected from www.data.worldbank.org and www.theglobaleconomy.com. Empirical research shows that more than 80% of the size of the shadow economy in these countries can be explained by factors such as the total number of employees, the tax rate as a percentage of commercial profits, GDP per capita and imports of goods and services as a percentage of GDP. At the same time, the correlation analysis proves that the increase and active participation of young people of working age reduces the volume of the shadow economy.