Evaluating the Impact of the Informal Economy on Businesses in South East Europe: Some Lessons from the 2009 World Bank Enterprise Survey
The South-East European Journal of Economics and Business, Vol. 7, 2012, No.1, pp. 99-110.
12 Pages Posted: 21 Dec 2015
Date Written: 2012
The aim of this paper is to evaluate the variable impacts of the informal economy on businesses and employment relations in South East Europe. Evidence is reported from the 2009 World Bank Enterprise Survey which interviewed 4,720 businesses located in South East Europe. The finding is not only that a large informal sector reduces wage levels but also that there are significant spatial variations in the adverse impacts of the informal economy across this European region. Small, rural and domestic businesses producing for the home market and the transport, construction, garment and wholesale sectors are most likely to be adversely affected by the informal economy. The paper concludes by calling for similar research in other global regions and for a more targeted approach towards tackling the informal economy.
Keywords: informal economy, workers' wages, underground economy, World Bank Enterprise Survey, South-East Europe
JEL Classification: E26, M26, O17, K42
Suggested Citation: Suggested Citation