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What Is the Unexpected Impact of Mandatory Gender-Equal Pay for Work of Equal Value on the Shadow Economy

Bibliographic Data

ID4388915
AuthorsNguyen Doan (0000-0003-2714-9254, School of Public Finance College of Economics, Law and Government University of Economics Ho Chi Minh City Ho Chi Minh City Vietnam), Canh Phuc Nguyen (0000-0001-8467-5010, School of Public Finance College of Economics, Law and Government University of Economics Ho Chi Minh City Ho Chi Minh City Vietnam, corresponding author), Huong Doan (0009-0002-3725-228X, Faculty of Business Administration University of Finance – Marketing Ho Chi Minh city Vietnam), Binh Quang Nguyen (0000-0002-9059-5866, University of Economics Ho Chi Minh City Ho Chi Minh City Vietnam)
Year2025
Volume75
Issue257
Pages585-601
Publication date2025-09-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueInternational Social Science Journal (JOURNAL)
Journal identifiersISSN: 0020-8701 • E-ISSN: 1468-2451
PublisherWiley (PUBLISHER • GB)
DOI10.1111/issj.12573
OpenAlexW4409564654
LanguageEN
Citations received1
References cited69

Laws mandating non-discrimination on the basis of gender (e.g., gender-equal pay for work of equal value) are expected to empower women, especially in employment, to achieve gender equality. We use data from 162 countries from 1995 to 2018 to provide new evidence that this law might have unexpected effects. We find that laws mandating gender-equal pay for work of equal value appear to reduce the size of the shadow economy. On average, the shadow economy measured by multiple indicators and multiple causes (MIMIC) and dynamic general equilibrium (DGE) models reduces by 0.198 and 0.514 percentage points, respectively, in countries mandating gender-equal pay for work of equal value. Such laws also increase male labour force participation by 0.543 percentage points. Moreover, instrumental variable estimates confirm that increased male labour force participation is the main mechanism for reducing the shadow economy. Our findings imply that laws requiring equal pay for work of equal value are not only a good actor in harmonizing the shadow economy but also create other challenges for policymakers, who need to assess whether employment laws effectively achieve their initial target of supporting disadvantaged female workers in the labour market

Demographic economics · Economics · Labour economics · Shadow (psychology) · Value (mathematics) · Work (physics) · Corporate Taxation and Avoidance · Fiscal Policy and Economic Growth · Psychology · Taxation and Compliance Studies

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Unique citing works1
Citations per year1
Citation span2026 - 2026 (1)
Citation velocitycurrent
Highly citedNo
Citation typesNeutral: 1

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