The underground economy, also known as the shadow economy or informal economy, refers to economic activity that generates income but is unreported to the government as required by law, often to avoid taxation or regulation. This can include a wide range of activities, both legal and illegal, such as undeclared cash transactions, off-the-books employment, informal services, the sale of illegal goods, and other economic exchanges that take place outside the formal, regulated sector of the economy. The size and nature of the underground economy can vary significantly across different countries and regions, influenced by factors such as tax rates, regulatory burdens, levels of corruption, and the availability of formal employment opportunities. While it can provide income for individuals who may be excluded from the formal economy, it also has implications for government revenue, economic statistics, and social protections for workers involved in these activities.