Abstract

This paper investigates whether the size of the shadow economy increases income inequality in Uganda. This p3aper applies the autoregressive distributed lag (ARDL) bounds testing approach to cointegration, to test the long- and short-run relationship between the shadow economy and income inequality. The results indicate a positive and statistically significant relationship between the size of the shadow economy and income inequality in both the long-run and short-run, all else equal. The results show that a large size of the shadow economy significantly increases income inequality, in both the long- and short-run. This suggests that people who fail to be absorbed into the formal economy face fewer livelihood opportunities, giving them the incentive to operate in the shadow economy as a means of survival, for them and their families since there are fewer chances of success in the formal economy. Our findings suggest that income inequality could be partially driven by increasing informality in the country. The practical implication of these results is that policies aimed at tackling income inequality should also be directed at addressing the underlying factors that drive the shadow economy.

摘要

本文研究了影子经济的规模是否加剧了乌干达的收入不平等。该p3aper将自回归分布滞后（ARDL）边界测试方法应用于协整，以测试影子经济与收入不平等之间的长期和短期关系。结果表明，在长期和短期内，影子经济的规模与收入不平等之间存在正向和统计上的显着关系，而其他所有条件都相同。结果表明，无论从长期还是短期来看，影子经济的规模都会大大增加收入不平等。这表明那些无法被正规经济所吸收的人们面临的生计机会较少，从而激励他们在影子经济中经营，以此作为生存的手段，对他们及其家庭而言，因为在正规经济中成功的机会更少。我们的发现表明，收入不平等的部分原因可能是该国日益增加的非正规性。这些结果的实际含义是，旨在解决收入不平等问题的政策也应针对解决驱动影子经济的潜在因素。