The Commonality of Envelope Wages in Eastern European Economies

Eastern European Economics, Vol. 47, No. 2, pp. 37-52, 2009

16 Pages Posted: 14 Dec 2015

See all articles by Colin Williams

Colin Williams

University of Sheffield - School of Management

Date Written: 2009

Abstract

This paper evaluates the commonality in Eastern European economies of the employment practice whereby formal employers pay their formal employees both a declared wage and an undeclared ‘envelope wage’. Until now, little survey evidence has been available. Here, an extensive Eurobarometer survey involving 10,171 face-to-face interviews in Eastern European economies conducted in 2007 is reported. The finding is that 1 in 10 formal employees had received envelope wages in the previous year amounting to on average two-fifths of their gross annual wage and this is found to be a ubiquitous practice, albeit one that is more common in some countries, sectors, occupations and population groups than others. The paper concludes by calling for a more in-depth evaluation of this wage practice in Eastern Europe and greater discussion of how this arrangement might be tackled.

Keywords: shadow economy, informal sector, undeclared work, envelope wages, tax compliance, Eastern Europe, European Union

JEL Classification: H26, J46, K42, O17, P3

Suggested Citation

Williams, Colin, The Commonality of Envelope Wages in Eastern European Economies (2009). Eastern European Economics, Vol. 47, No. 2, pp. 37-52, 2009, Available at SSRN: https://ssrn.com/abstract=2702903

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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