In this paper we investigated empirically the nature of the relation between underground employment and unions in Italy … opposite channels through which unions affect underground employment: a macro-effect, generating shadow activities via higher … wages and market rigidities; a micro-effect, entailing a negative impact of trade union power on underground employment. We …

presence of moonlighting firms over ghost firms. The former are firms that operate simultaneously in the official and …, through an ad-hoc assumption we represent a specific technological advantage of moonlighting firms over ghost firms, modelled … results, a tax cut (rise), induces the moonlighting firm to engage in more (less) official production. Contrary to the …