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Article
Publication date: 2 March 2021

Colin C. Williams and Gamze Oz-Yalaman

The temporary enforced closure of businesses in response to the coronavirus pandemic has resulted in governments in Europe and beyond offering short-term financial support to the…

633

Abstract

Purpose

The temporary enforced closure of businesses in response to the coronavirus pandemic has resulted in governments in Europe and beyond offering short-term financial support to the businesses and workers affected. The purpose of this paper is to evaluate a group of workers unable to benefit from the short-term job retention schemes and support to the self-employed made available by governments, namely, those whose paid work is comprised wholly of undeclared work, and how this could be addressed.

Design/methodology/approach

To identify those whose paid work is entirely undeclared, a Eurobarometer survey of undeclared work in Europe is reported conducted in September 2019, just prior to the pandemic, and involving 27,565 face-to-face interviews in 28 European countries.

Findings

The finding is that the paid work of one in every 132 European citizens is comprised wholly of undeclared work, and these workers are concentrated in non-essential businesses and activities severely affected by the lockdown. These workers whose paid work is comprised wholly of undeclared work are significantly more likely to be widowed or divorced/separated, living in households with three or more adults, without children and most of the time have financial difficulties in making ends meet.

Practical implications

Given that businesses and workers in the undeclared economy are largely unable to work under lockdown, it is argued that providing access to short-term financial support, through a regularisation initiative based on voluntary disclosure, would not only provide the income support these workers need but also bring them out of the shadows and put them on the radar of the state authorities, thus transforming undeclared work into declared work.

Originality/value

This paper shows how in the current or repeat lockdowns, the short-term financial support made available by governments can be used to transform undeclared work into declared work.

Details

Employee Relations: The International Journal, vol. 43 no. 3
Type: Research Article
ISSN: 0142-5455

Keywords

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Article
Publication date: 25 May 2021

Colin Williams and Gamze Oz-Yalaman

Until now, most scholars have used one of four competing theories to explain undeclared work. Political economy theories explain undeclared work as resulting from the exclusion of…

280

Abstract

Purpose

Until now, most scholars have used one of four competing theories to explain undeclared work. Political economy theories explain undeclared work as resulting from the exclusion of workers from formal work and welfare, neo-liberal theories explain such work as a voluntarily chosen rational economic decision and neo-institutionalist and post-structuralist theories explain those engaging as social actors who disagree with the formal rules or seek to help others out respectively. Recognising that each theory focuses upon different employment relationships, this paper evaluates the proposition that these different theories are more explanations of different types of undeclared work.

Design/methodology/approach

To evaluate this, data reported is collected in 2019 across 28 European countries (the 27 member states of the European Union and the United Kingdom) in special Eurobarometer survey 92.1 involving 27,565 interviews.

Findings

Of the 3.6% of citizens participating in undeclared work, 10% engage in undeclared waged employment, 42% in undeclared self-employment and 48% in undeclared paid favours. Reporting their rationales, 7% state purely political economy exclusion-driven reasons, 19% solely neo-liberal rational economic actor reasons, 20% purely social actor reasons and 54% mixed motives. A logistic regression analysis finds those engaging in undeclared waged employment significantly more likely to state purely exclusion-driven rationales, those engaging in undeclared self-employment significantly more likely to state neo-liberal rational economic actor and neo-institutionalist social actor rationales and those engaging in undeclared paid favours post-structuralist social actor motives.

Practical implications

This finding suggests that the policy initiatives required to tackle undeclared work will vary according to the type of undeclared work addressed. These are outlined.

Originality/value

Evidence is provided that a different weighting needs to be given to different theories when explaining each type of undeclared work.

Details

Employee Relations: The International Journal, vol. 43 no. 6
Type: Research Article
ISSN: 0142-5455

Keywords

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Article
Publication date: 24 September 2020

Colin Williams and Gamze Oz-Yalaman

The dominant theorisation of the informal economy views participants as rational economic actors operating in the informal economy when the expected benefits exceed the perceived…

367

Abstract

Purpose

The dominant theorisation of the informal economy views participants as rational economic actors operating in the informal economy when the expected benefits exceed the perceived costs of being caught and punished. Recently, an alternative theory has emerged which views participants as social actors operating in the informal economy due to their lack of vertical trust (in governments) and horizontal trust (in others). The aim of this paper is to evaluate these competing theorisations.

Design/methodology/approach

To do so, data are reported from special Eurobarometer surveys conducted in 2007, 2013 and 2019 in eight West European countries (Austria, Belgium, France, Germany, Ireland, Luxembourg, the Netherlands and the United Kingdom).

Findings

Using probit regression analysis, the finding is that increasing the expected likelihood of being caught and level of punishment had a weak significant impact on the likelihood of participating in the informal economy in 2007, and there was no significant impact in 2013 and 2019. However, greater vertical and horizontal trust is significantly associated with a lower level of participation in the informal economy in all three time periods.

Practical implications

The outcome is a call for a policy to shift away from increasing the expected level of punishment and likelihood of being caught, and towards improving vertical and horizontal trust. How this can be achieved is explored.

Originality/value

Evidence is provided in a Western European context to support a shift away from a rational economic actor to a social actor approach when explaining and tackling the informal economy.

Details

Journal of Economic Studies, vol. 48 no. 5
Type: Research Article
ISSN: 0144-3585

Keywords

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Article
Publication date: 25 August 2021

The authors wanted to examine why undeclared workers had not received financial assistance in Europe during the pandemic and find the best way to help them and bring them out of…

106

Abstract

Purpose

The authors wanted to examine why undeclared workers had not received financial assistance in Europe during the pandemic and find the best way to help them and bring them out of the shadows.

Design/methodology/approach

To identify those whose paid work is entirely undeclared, a Eurobarometer survey of undeclared work in Europe is reported conducted in September 2019, just prior to the pandemic, and involving 27,565 face-to-face interviews in 28 European countries.

Findings

The paid work of one in every 132 citizens in Europe comprises wholly of undeclared work and one in 28 work at least some of the time in the undeclared economy. These workers have received no support, but they are more likely to be financially vulnerable. A high percentage of undeclared workers are widowed, divorced and living in households with multiple persons.

Originality/value

The authors argue that short-term support for these individuals could not only help them to survive the pandemic financially, but also transform undeclared work into declared work with long-term benefits for individuals and the wider economy.

Details

Human Resource Management International Digest , vol. 29 no. 7
Type: Research Article
ISSN: 0967-0734

Keywords

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