Social Behavior Research and Practice

The main purpose of the literature review is an analysis of the impact of shadow activity on social and economic relations and the welfare of the population. The scientific novelty of the research is in the development and realization of the model of interaction of the state and population as a factor contributing to the shadow economic activity. It was shown that shadow economy promotes an increase in the welfare of the population only in case of one representative and on the contrary it decreases the welfare of the population when represented by many representatives. The direct dependence of the growth of the state debt and the growth of a share on the shadow economy was elaborated. The social reasons underlying the growth of shadow activity and the level of its impact on the welfare of the population was analyzed in various countries. It was reasoned that the high-level of shadow economy in the Russian Federation intensifies the social inequality and discrepancies associated with the income and property of its population. The scale and differentiation of the shadow activity was distinct in the constituent territories of the Russian Federation, including the Republic of Dagestan.