۱٫ Introduction

۲٫ Eurobarometer survey analysis

۳٫ Logistic regression

۴٫ Conclusions

References

In the context of European economic recovery, undeclared work has become a true challenge for the labour market policies, mainly because it affects tax revenue, social security and labour standards. Without better understanding of the main determinants of undeclared work, little can be done to prevent it. Having these in mind and based on the Eurobarometer survey, the paper aims to find the main factors that trigger undeclared work. Our findings suggest that after the economic crisis, the trust in national authorities has dropped and generated more undeclared payments, especially for the case of small and medium firms.

Introduction

In the context of European economic recovery, undeclared work has become a true challenge for the labour market policy implementation, mainly because of its negative influence upon economy. At EU level, the concept of undeclared work is generally understood as any paid activity carried out in a formal undertaking, partially or fully undeclared to public authorities. Self-employed work could also meet the basic definition, when a self-employed person provides services either to a formal enterprise or to other clients, such as households. Clearly, undeclared work primarily affects tax revenues and implicitly, it also affects social security, labour standards and workers’ safety. In an increasing number of EU member states, hard work has already been done towards reducing and preventing undeclared work. Most papers focused on developing and testing policy measures that aim to tackle undeclared work around all 28 EU member states and feasible measures for different nations were taken under discussion (EIRO, 2005; European Employment Observatory, 2007; Renooy et al, 2004; Williams, Horlings and Renooy, 2008).Most findings suggest that undeclared work is often carried out in sectors like construction, renovation or repair works, cleaning, babysitting or care for the elderly. Regarding the regional particularities at EU level, Hazans (2011) found for a set of 30 European countries that the informal sector is mostly present in the Southern Europe and less in the North, while the difference between West and East is almost insignificant.