It is interesting to note that one of the policies ever considered to reduce the size of the shadow economy was reduction of working hours. At that time, policy-makers thought that the main reason people didn’t want to work in the official economy was the long working hours. By reducing the working hours, they believed they would be able to encourage people to move from the shadow economy to the official economy.
What they didn’t realize was that by reducing the working hours, it caused more people to seek additional jobs and most often, they found those jobs in the shadow economy, resulting in its further expansion. It was only a while later that somebody proposed the implementation of flexible working hours, something which we now thought as common sense but apparently, was not so in the past.
Posted by Andre Wirjo at 5:32 PM
Labels: economy, reflection
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