Informal self-employment within the non-observed economy of Israel
by Labib Shami; Gil Cohen; Osnat Akirav; Arie Herscovici; Limor Yehuda; Sagit Barel-Shaked
International Journal of Entrepreneurship and Small Business (IJESB), Vol. 52, No. 2, 2024

Abstract: This study estimates the size of the non-observed economy, and the share within it that stems from informal economic activity among the self-employed, using a modified currency demand approach adapted to the Israeli economy. By assessing the demand for currency arising from the economic activity of the self-employed, the extent of informal self-employment is estimated as a percentage of GDP. According to the model, the share of the non-observed economy and informal economic activity among the self-employed has been characterised by a downward trend over the last decade. In 2019, the informal economic activity among the self-employed reached nearly NIS 102 billion, 65% of the size of the non-observed economy. The rest stems from illegal activity, which accounts for about NIS 55 billion.

Online publication date: Wed, 01-May-2024

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