Evaluating the Participation of the Unemployed in Undeclared Work

ABSTRACT

This paper evaluates critically the major competing perspectives regarding the participation of the unemployed in undeclared work. These are firstly, the ‘marginalisation’ perspective which holds that the unemployed disproportionately participate in and gain from undeclared work, and secondly, the ‘reinforcement’ perspective which holds that the unemployed benefit less from undeclared work than those in declared employment, meaning that undeclared work reinforces, rather than reduces, the inequalities produced by the declared realm. Reporting the results of a 2007 Eurobarometer survey on undeclared work comprising 26,659 face-to-face interviews conducted in the 27 member states of the European Union, the finding is that the marginalisation perspective is applicable to Southern Europe and the reinforcement perspective to Nordic nations. However, in East-Central Europe and Western European nations, as well as the EU-27 as a whole, the marginalisation and reinforcement perspectives are not mutually exclusive but co-exist; the unemployed are more likely to participate in undeclared work but receive significantly lower earnings and gain less from undeclared work than those working undeclared who are in declared jobs. The outcome is a call for a new ‘reinforced marginalisation’ perspective which holds that the unemployed disproportionately engage in undeclared work but their participation reinforces their marginalised position relative to the employed. The paper then seeks tentative explanations for these findings.

Key words:

• informal economy
• informal employment
• tax compliance
• unemployment
• European Union

Additional information

Notes on contributors

Colin C. Williams

Colin C. Williams is Professor of Public Policy in the Management School at the University of Sheffield in the United Kingdom. His research interests include the informal economy, work organisation and the future of work, subjects on which he has published some 20 monographs and 270 journal articles over the past 25 years. His recent books include Informal Work in Developed Nations (2010, Routledge), Rethinking the Future of Work: directions and visions (2007, Palgrave Macmillan), The Hidden Enterprise Culture (2006, Edward Elgar), A Commodified World? mapping the limits of capitalism (2005, Zed) and Cash-in-Hand Work (2004, Palgrave Macmillan).

Sara Nadin

Sara Nadin is a Lecturer in Organisational Behaviour and Human Resource Management in the Management School at the University of Sheffield in the United Kingdom. She was previously an ESRC post-doctoral research fellow at the University of Sheffield and has held lectureships at the University of Leeds and the University of Bradford. Her research interests are in the informal economy, entrepreneurship, small business and the psychological contract. She has recently been coordinating an Institute for Small Business and Entrepreneurship (ISBE) research and knowledge exchange grant on developing policies to help businesses make the transition from informal to formal enterprise.