Explaining Employers' Illicit Envelope Wage Payments in the EU‐27: A Product of Over‐Regulation or Under‐Regulation?

16 Pages Posted: 4 Jun 2013

See all articles by Colin Williams

Colin Williams

University of Sheffield - School of Management

Date Written: July 2013

Abstract

The aim of this paper is to evaluate the prevalence in the 27 member states of the European Union of a little discussed illicit wage arrangement in which formal employees are paid two wages by their formal employers – an official declared salary and an additional undeclared wage, thus allowing employers to evade their full social insurance and tax liabilities. Reporting the results of a 2007 Eurobarometer survey involving 26,659 face‐to‐face interviews, the finding is that one in 18 formal employees received such an envelope wage from their formal employer and that envelope wage payments are more prevalent in member states with lower (rather than higher) levels of state intervention. The tentative conclusion is that illicit envelope wage payments are a product of under‐regulation, rather than over‐regulation, and that further research is now required to test the validity analysis of this thesis in other global regions.

Suggested Citation

Williams, Colin, Explaining Employers' Illicit Envelope Wage Payments in the EU‐27: A Product of Over‐Regulation or Under‐Regulation? (July 2013). Business Ethics: A European Review, Vol. 22, Issue 3, pp. 325-340, 2013, Available at SSRN: https://ssrn.com/abstract=2273986 or http://dx.doi.org/10.1111/beer.12022

Colin Williams (Contact Author)

University of Sheffield - School of Management ( email )

15 Conduit Road
Sheffield, S10 1FL
United Kingdom

HOME PAGE: http://https://www.sheffield.ac.uk/management/staff/williams/index

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