The underground economy refers to economic activities that occur outside of government regulation and taxation. This includes unreported income from jobs, illegal trade, and informal work arrangements. People often engage in these activities to avoid taxes or regulations, which can lead to a lack of legal protections for workers. Activities in the underground economy can range from small-scale services, like babysitting or lawn care, to larger operations, such as the sale of illegal goods. While it can provide income for individuals, it also poses challenges for governments, as it reduces tax revenue and complicates economic planning.