Elements of a Preventative Approach Towards Undeclared Work: An Evaluation of Service Vouchers and Awareness Raising Campaigns

European Commission, Brussels (2018)

Posted: 15 Aug 2018

See all articles by Colin Williams

Colin Williams

University of Sheffield - School of Management

Date Written: May 18, 2018


The aim of this study is to review the range of preventative approaches for tackling undeclared work available to Member States, and to focus upon two types of preventative measure, namely service vouchers and the use of awareness raising campaigns. The rationale for a preventative approach is to shift away from resolving problems after they have occurred towards preventing non-compliance in the first place. To prevent undeclared work and transform undeclared work into declared work, four types of preventative policy measure are available: supply-side incentives; demand-side incentives; awareness raising campaigns and resolving formal institutional imperfections. This report focuses upon the demand-side incentive of service vouchers and awareness raising schemes. It provides a series of recommendations for Member States and the Platform. Recommendations for Member States: • Governments should shift away from resolving undeclared work after it has occurred and towards preventing non-compliance in the first place. • Governments should engage in ex-ante and ex-post evaluation of both deterrence and preventative policy measures, as well as pilot studies, to develop an evidence-base on what works and what does not. • Governments should consider conducting pilot initiatives using some variant of voucher schemes and evaluate its effectiveness at tackling undeclared work. • Government and social partners should pilot and experiment with different types of awareness raising campaign, drawing upon good practices developed in other Member States but tailored to their specific context, and should actively contribute examples and evaluations of good practice to enable the Platform to develop a repository of good practice as part of its Online Toolkit (see below). Recommendations for the Platform • The Platform should further facilitate a holistic coordinated strategic approach at Member State level, as per the legal decision establishing the Platform, not least through mutual learning. This will speed up the process of modernisation and shift beyond a fragmented departmental ‘silos’ approach, which results in many enforcement authorities remaining focused upon deterrents and not adopting strategic objectives related to preventing undeclared work. • The Platform could support the use of evaluation and ‘pilot exercises’ to identify which preventative measures are most effective and in what circumstances, to foster a culture of evidence-based practice. • The Platform could adopt as a future activity in its work programme the development of an Online Undeclared Work Awareness Raising Campaign Toolkit. This would provide practical advice on how to prepare and run successful awareness raising campaigns and practical examples of various communication tools with tips for their use. • The Platform should consider the feasibility of planning, developing and executing an EU-wide awareness raising campaign on tackling undeclared work, perhaps based on a ‘hub and spoke’ model with a generic EU-wide campaign running alongside coordinated more ‘tailored’ Member State and social partner campaigns.

Keywords: informal sector, informal economy, tax evasion

JEL Classification: H26

Suggested Citation

Williams, Colin, Elements of a Preventative Approach Towards Undeclared Work: An Evaluation of Service Vouchers and Awareness Raising Campaigns (May 18, 2018). European Commission, Brussels (2018), Available at SSRN: https://ssrn.com/abstract=3180641

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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