Beyond the Formal/Informal Jobs Divide: Evaluating the Prevalence of Hybrid ‘Under-Declared’ Employment in South-Eastern Europe

International Journal of Human Resource Management, Vol. 21, N. 14, pp. 2529-2546, 2010

Posted: 14 Dec 2015

See all articles by Colin Williams

Colin Williams

University of Sheffield - School of Management

Date Written: 2010

Abstract

To evaluate critically the recurring assumption that a job is either formal or informal, but never simultaneously both, this paper uncovers how in South-Eastern Europe many formal employees receive not only a declared wage from their formal employer but also an additional undeclared (‘envelope’) wage. Reporting a 2007 EU-wide survey comprising 26,659 face-to-face interviews, some 1 in 6 (16 per cent) formal employees in South-East Europe are found to be in these hybrid ‘under-declared’ jobs receiving on average 60 per cent of their gross salary as an envelope wage. Uncovering how despite this employment arrangement being unevenly distributed across countries, employee groups and businesses, it is not confined to small pockets but is ubiquitous across the South-East European labour market and beyond, the paper then concludes by discussing the implications for both policy and theory of the existence of ‘under-declared’ formal employment.

Keywords: informal economy, undeclared work, underground sector, dual economy, envelope wages, tax non-compliance, South-Eastern Europe, European Union

JEL Classification: H26, J46, K42, O17

Suggested Citation

Williams, Colin, Beyond the Formal/Informal Jobs Divide: Evaluating the Prevalence of Hybrid ‘Under-Declared’ Employment in South-Eastern Europe (2010). International Journal of Human Resource Management, Vol. 21, N. 14, pp. 2529-2546, 2010, Available at SSRN: https://ssrn.com/abstract=2702976

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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