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underground economy

Definition of Underground Economy

(noun) An unregulated economic system where goods and services are produced, distributed, and consumed, involving income that is not reported to the government or taxed.

Examples of Underground Economy

  • black markets
  • garage sales
  • prostitution rings
  • undocumented laborers
  • unlicensed contractors

Underground Economy Pronunciation

  • IPA Pronunciation
    • American English
      • /ˈˌəndərˈɡraʊnd iˈkɑnəmi/
      • /ˈˌəndərˈɡraʊnd əˈkɑnəmi/
      • /ˈəndərˌɡraʊnd iˈkɑnəmi/
      • /ˈəndərˌɡraʊnd əˈkɑnəmi/
    • British English
      • /ˌʌndəˈɡraʊnd ᵻˈkɒnəmi/
      • /ˈʌndəɡraʊnd ᵻˈkɒnəmi/
  • Syllabification: (un·der·ground e·con·o·my)

Usage Notes

  • Plural: underground economies
  • Underground economies are informal and hidden, they can also be black markets.
  • Underground economies operate outside of the State, thus without regulations to protect people from harm and exploitation.

Additional Information

Related Terms


Works Consulted

Brinkerhoff, David, Lynn White, Suzanne Ortega, and Rose Weitz. 2011. Essentials of Sociology. 8th ed. Belmont, CA: Wadsworth.

Encyclopædia Britannica. (N.d.) Britannica Digital Learning. (https://britannicalearn.com/).

Griffiths, Heather, Nathan Keirns, Eric Strayer, Susan Cody-Rydzewski, Gail Scaramuzzo, Tommy Sadler, Sally Vyain, Jeff Bry, Faye Jones. 2016. Introduction to Sociology 2e. Houston, TX: OpenStax.

Henslin, James M. 2012. Sociology: A Down-to-Earth Approach. 10th ed. Boston: Allyn & Bacon.

Macionis, John. 2012. Sociology. 14th ed. Boston: Pearson.

Macionis, John, and Kenneth Plummer. 2012. Sociology: A Global Introduction. 4th ed. Harlow, England: Pearson Education.

Oxford University Press. (N.d.) Oxford Dictionaries. (https://www.oxforddictionaries.com/).

Schaefer, Richard. 2013. Sociology: A Brief Introduction. 10th ed. New York: McGraw-Hill.

Taylor & Francis. (N.d.) Routledge Handbooks Online. (https://www.routledgehandbooks.com/).

Thompson, William E., and Joseph V. Hickey. 2012. Society in Focus: An Introduction to Sociology. 7th ed. Boston: Allyn & Bacon.

Wikipedia contributors. (N.d.) Wikipedia, The Free Encyclopedia. Wikimedia Foundation. (https://en.wikipedia.org/).

Wiley. (N.d.) Wiley Online Library. (http://onlinelibrary.wiley.com/).

Cite the Definition of Underground Economy

ASA – American Sociological Association (5th edition)

Bell, Kenton, ed. 2013. “underground economy.” In Open Education Sociology Dictionary. Retrieved October 16, 2019 (https://sociologydictionary.org/underground-economy/).

APA – American Psychological Association (6th edition)

underground economy. (2013). In K. Bell (Ed.), Open education sociology dictionary. Retrieved from https://sociologydictionary.org/underground-economy/

Chicago/Turabian: Author-Date – Chicago Manual of Style (16th edition)

Bell, Kenton, ed. 2013. “underground economy.” In Open Education Sociology Dictionary. Accessed October 16, 2019. https://sociologydictionary.org/underground-economy/.

MLA – Modern Language Association (7th edition)

“underground economy.” Open Education Sociology Dictionary. Ed. Kenton Bell. 2013. Web. 16 Oct. 2019. <https://sociologydictionary.org/underground-economy/>.