Tackling Undeclared Work in Croatia: Knowledge-Informed Policy Responses

Franic, J. and Williams, C., 2017. Unregistered Economic Practices in Croatia, Sheffield University Management School, University of Sheffield, GREY Working Paper No. 9, March 2017

10 Pages Posted: 28 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 has deep roots in Croatia. One in eleven declare to have done some fully undeclared work. Six out of ten though believe at least 20% of their compatriots violate tax and labour laws. The perception of the widespread nature of undeclared work and the lack of trust in formal institutions seem to be the main incentives for people to engage in undeclared work. These have been exacerbated by high unemployment and low retirement income. Hence, the conventional rational actor approach to tackling undeclared work that focuses upon increasing penalties and surveillance has become less effective in Croatia. An alternative perspective, called the social actor approach, focuses upon the changing values and beliefs, and the modernising of formal institutions. It seems to have stronger empirical support in Croatia. The Croatian government should at the very least supplement penalties and surveillance with more marketing, education, and higher social spending to tackle undeclared work.

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

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

Suggested Citation

Stefanov, Ruslan and Williams, Colin and Rodgers, Peter, Tackling Undeclared Work in Croatia: Knowledge-Informed Policy Responses (August 25, 2017). Franic, J. and Williams, C., 2017. Unregistered Economic Practices in Croatia, Sheffield University Management School, University of Sheffield, GREY Working Paper No. 9, March 2017, Available at SSRN: https://ssrn.com/abstract=3026376

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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