Envelope Wages in the European Union
International Labour Review, Vol. 152, No. 3–4, pp. 411-430 (2013)
20 Pages Posted: 22 Dec 2015
Date Written: 2013
This paper reveals how many formal employees in the European Union receive from their formal employer not only a declared wage but also an additional undeclared (‘envelope’) wage. Reporting a 2007 survey involving 26,659 face-to-face interviews, the finding is that 1 in 18 formal employees received envelope wages from their formal employer, which on average amounted to 25% of their gross salary, and that envelope wage payments prevail more in some countries, employee groups and businesses than others. The paper concludes by discussing the theoretical and policy implications.
Keywords: informal economy, tax evasion, shadow economy, tax, Europe
JEL Classification: H26, J46, J48, K34, K42, O17
Suggested Citation: Suggested Citation