The Effects of Education and Technology on Pakistan's Shadow Economy

Abstract

Pakistan is a developing country with numerous economic challenges, including corruption, inflation, poverty, unemployment, tax evasion, and shadow economy, all of which contribute to Pakistan's lower GDP. In developing economies like Pakistan, the shadow economy is a major matter of concern because it lowers the economy's growth rate. An increase in the informal economy reduces governmental revenue. With advancement of technology, we now have ICTs (information and communication technologies), cash turnover is reduced, and financial transactions are made more easier after monitoring. It is possible to contribute to economic growth by reducing the informal economy. Extra resources devoted to increase the education level can help to minimize the extent of the informal economy. In literature the study to examine the impact of technology and education on shadow economy in Pakistan's economy is inevitable. Objective of this research is to investigate the impact of technology and education on shadow economy of Pakistan covering the period of 1990-2020. The study will develop the econometric model of time series data and applied the Unit root test. I applied the Autoregressive Distributed Lag Model and find the short run and Long run results