Tackling Undeclared Work in Bulgaria: Knowledge-Informed Policy Responses

GREY Policy Brief, No. 1, 2017

12 Pages Posted: 29 Aug 2017

See all articles by Ruslan Stefanov

Ruslan Stefanov

University of Sheffield - School of Management

Colin Williams

University of Sheffield - School of Management

Peter Rodgers

University of Sheffield

Date Written: August 25, 2017

Abstract

Undeclared work is socially accepted and widely practiced in Bulgaria. The undeclared economy is estimated at roughly a third of GDP. Nearly one in ten people do some undeclared work. Undeclared work is motivated primarily by lack of trust between the people and the authorities. It involves mostly people who voluntarily exit the declared economy but also those that are excluded. The conventional repressive approach to tackling undeclared work has exhausted its effects in Bulgaria. It should be complemented with more curative, preventative and commitment policies. Policymakers should consider not just the rational but also the social actor approach which tackles trust issues and the asymmetry between formal and informal rules. Authorities should continue modernising institutions and should increase social spending and public awareness campaigns.

Keywords: informal economy, shadow economy, tax evasion, labor economics, informal sector, Bulgaria

JEL Classification: H26, J46, J48, K34, K42, O17, P37

Suggested Citation

Stefanov, Ruslan and Williams, Colin and Rodgers, Peter, Tackling Undeclared Work in Bulgaria: Knowledge-Informed Policy Responses (August 25, 2017). GREY Policy Brief, No. 1, 2017, Available at SSRN: https://ssrn.com/abstract=3026332 or http://dx.doi.org/10.2139/ssrn.3026332

Ruslan Stefanov

University of Sheffield - School of Management ( email )

9 Mappin Street
Sheffield, S1 4DT
United Kingdom

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

Peter Rodgers

University of Sheffield ( email )

17 Mappin Street
Sheffield, Sheffield S1 4DT
United Kingdom

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