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Shadow Economy: Definitions, Terms And Theoretical Considerations, Colin C. Williams May 2019

Shadow Economy: Definitions, Terms And Theoretical Considerations, Colin C. Williams

Colin C Williams

The last decades, many scholars highlighted the shadow economic activities, regarding their disadvantages (unemployment, impoverishment etc) and advantages (intensifies competition, flexibility in employment etc). During the financial crisis, informal activities rose in noisy way, which triggered the development of special definitions to describe a wide range of actions which in turn have gradually configured and updated the content of the shadow economy term. In this paper we present the theoretical background of the shadow economy term, by selecting the main worldwide literature published from 1973 to 2018. Many studies have tried to definite the shadow economy term but none has ...


Ifth Plenary Meeting Of The European Platform Tackling Undeclared Work Report On Tackling Under-Declared Employment In The European Union, Colin C. Williams Mar 2019

Ifth Plenary Meeting Of The European Platform Tackling Undeclared Work Report On Tackling Under-Declared Employment In The European Union, Colin C. Williams

Colin C Williams

The fifth Plenary meeting of the European Platform Tackling Undeclared Work was held in Brussels on 18-19 October 2018. The first day of this meeting was dedicated to the topic of tackling under-declared employment in the European Union. This report summarises the discussions at the workshop, which drew on the findings of two studies on this topic produced as part of the Platform’s work programme.

The objective of this thematic discussion on under-declared employment in the European Union was: (i) to exchange information on what works and what does not, (ii) to generate knowledge about under-declared employment, and (iii ...


Tackling Undeclared Work In The Agricultural Sector, With A Focus Upon Seasonal Workers And Horticulture: Executive Summary, Colin C. Williams Mar 2019

Tackling Undeclared Work In The Agricultural Sector, With A Focus Upon Seasonal Workers And Horticulture: Executive Summary, Colin C. Williams

Colin C Williams

The Platform seminar provided participants with an opportunity to reflect on existing practices, tools and
approaches that deal with undeclared work in the agricultural sector in Europe. Discussions focused on methods
and tools for the prevention and deterrence of undeclared work in the agricultural sector and Platform members,
observers and social partners played an active and central role in the day.


Institutional Asymmetry And The Acceptability Of Undeclared Work: Synthesis Report, Colin C. Williams Jan 2019

Institutional Asymmetry And The Acceptability Of Undeclared Work: Synthesis Report, Colin C. Williams

Colin C Williams

This report is part of the project SHADOWSwhich aims to investigate the effectiveness of different policy measures in reducing undeclared work. As such, the project evaluates not only the effectiveness of using a rational economic actor approach (that tackles undeclared work by ensuring that the payoff from undeclared work is outweighed by the costs), and a social actor approach (grounded in a view that undeclared work arises when tax morale is low), but also analyses the interaction effects (between deterrents and tax morale, and vertical and horizontal trust) in various contexts. This report focuses on the social actor approach ...


Tackling Undeclared Work In The Agricultural Sector, With A Focus Upon Seasonal Workers And Horticulture: Background Paper For The European Platform On Tackling Undeclared Work Seminar, Colin C. Williams Jan 2019

Tackling Undeclared Work In The Agricultural Sector, With A Focus Upon Seasonal Workers And Horticulture: Background Paper For The European Platform On Tackling Undeclared Work Seminar, Colin C. Williams

Colin C Williams

This background paper briefly sets out the prevalence of undeclared work in the agricultural sector in the European Union and the approaches and tools available for tackling such work, with a focus upon horticulture and undeclared seasonal workers. The intention is to stimulate the thoughts of participants attending the European Platform Tackling Undeclared Work seminar on “Tackling undeclared work in the agricultural sector: with a focus upon seasonal workers and horticulture” (to be held in Brussels on January 24th 2019) on potential policy which could be adopted to transform undeclared work into declared work in the agricultural sector, especially with ...


Tackling Undeclared Work In The Agricultural Sector, Colin C. Williams Nov 2018

Tackling Undeclared Work In The Agricultural Sector, Colin C. Williams

Colin C Williams

This study evaluates the prevalence, distribution and characteristics of undeclared work in the agricultural, forestry and fishing sector (henceforth ‘agricultural sector’) in the EU and how this can be tackled. To do so, the prevalence, distribution and characteristics of undeclared work in the agricultural sector, along with its systemic drivers, are analysed. This analysis then provides the evidence base for an analysis of how undeclared work can be tackled. To identify how to achieve this, an analysis is undertaken of the legislative and institutional frameworks, of the policy approaches for tackling undeclared work in the agricultural sector, and an evidence-based ...


Glossary Of Terms: European Platform Tackling Undeclared Work, Colin C. Williams Nov 2018

Glossary Of Terms: European Platform Tackling Undeclared Work, Colin C. Williams

Colin C Williams

This glossary is intended to provide a common understanding of the terminology that is used in the European Platform tackling undeclared work web pages, documents and publications. It does not provide official Platform definitions of the terms listed therein. Where possible, references are provided to the source of the understandings provided.
To facilitate understanding, the terms in the glossary are grouped together rather than presented as an A-Z list.

In the first section, the common understandings about undeclared work and its various sub-types are provided, followed by other related concepts and terms often used for activities related to undeclared work ...


Explaining And Tackling Under-Declared Employment In Fyr Macedonia: The Employers Perspective, Colin C. Williams, Slavko Bezeredi Oct 2018

Explaining And Tackling Under-Declared Employment In Fyr Macedonia: The Employers Perspective, Colin C. Williams, Slavko Bezeredi

Colin C Williams

The aim of this paper is to evaluate how employers who illegally under-report their employees’ salaries to
evade paying the full tax and social contributions owed can be explained and tackled. These employers have
been conventionally explained as rational economic actors doing so when the benefits outweigh the costs,
and thus the solution is to increase the sanctions and/or probability of detection. An alternative social actor
approach, however, explains employers as under-reporting salaries because of their lack of both vertical trust
(i.e., their beliefs are not in symmetry with the laws and regulations) and horizontal trust (i.e ...


Does Trust Prevent Undeclared Work? An Evaluation Of The Social Actor Approach, Colin C. Williams Aug 2018

Does Trust Prevent Undeclared Work? An Evaluation Of The Social Actor Approach, Colin C. Williams

Colin C Williams

In recent decades, a burgeoning literature has brought out of the shadows the magnitude of the undeclared economy. This reveals that the undeclared economy is a persistent feature of contemporary economies. With the equivalent of 17.9 per cent of GDP not declared to the authorities in the European Union in 2016 [1], undeclared work representing 14.3 per cent of gross value added in the private sector in 2013 [2] and 4 per cent of EU28 citizens conducting undeclared work [3], tackling the undeclared economy is not some minor issue. Addressing this practice is important. This is not only ...


Explaining Informal Sector Entrepreneurship In Kosovo: An Institutionalist Perspective, Colin C. Williams May 2018

Explaining Informal Sector Entrepreneurship In Kosovo: An Institutionalist Perspective, Colin C. Williams

Colin C Williams

Institutional theory has been widely used to explain entrepreneurship in the informal economy.
A first wave of institutionalist theory argued that informal entrepreneurship resulted from formal
institutional failures and a second wave that such entrepreneurship results from an asymmetry
between the laws and regulations of formal institutions and the unwritten socially shared rules of
informal institutions. This paper evaluates the validity of these two waves of institutionalist explanation
and a new third wave of institutional theory explaining informal entrepreneurship in terms
of a lack of both vertical and horizontal trust. Reporting data from a 2013 survey in Kosovo
involving 500 ...


Evaluating Competing Theories Of Informal Sector Entrepreneurship: A Study Of The Determinants Of Cross-Country Variations In Enterprises Starting-Up Unregistered, Colin C. Williams May 2018

Evaluating Competing Theories Of Informal Sector Entrepreneurship: A Study Of The Determinants Of Cross-Country Variations In Enterprises Starting-Up Unregistered, Colin C. Williams

Colin C Williams

To advance understanding of the reasons for informal sector entrepreneurship, this article evaluates the determinants of
cross-country variations in the extent to which enterprises are unregistered when they start operating. Reporting the
World Bank Enterprise Survey data on 67,515 enterprises across 142 countries, the finding is that one in five (19.9%) of
the formal enterprises surveyed started-up unregistered, although this varies from all enterprises surveyed in some
countries (e.g. Pakistan) to 1% of surveyed enterprises in Slovakia. To explain these cross-country variations, four
competing theories are evaluated which variously assert that nonregistration is determined by either: economic ...


Elements Of A Preventative Approach Towards Undeclared Work: An Evaluation Of Service Vouchers And Awareness Raising Campaigns, Colin C. Williams May 2018

Elements Of A Preventative Approach Towards Undeclared Work: An Evaluation Of Service Vouchers And Awareness Raising Campaigns, Colin C. Williams

Colin C Williams

1.          Introduction
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.
2.          Rationales for a preventative approach
·       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.
·       Article 1 of Decision (EU) 2016/3441, establishing the Platform, explicitly encourages such a preventative approach. It states that ‘”tackling”, in relation to undeclared work, means preventing, deterring ...


Elements Of A Preventative Approach Towards Undeclared Work: An Evaluation Of Service Vouchers And Awareness Raising Campaigns: Outputs From Plenary Discussion Of The European Platform Tackling Undeclared Work, Colin C. Williams Apr 2018

Elements Of A Preventative Approach Towards Undeclared Work: An Evaluation Of Service Vouchers And Awareness Raising Campaigns: Outputs From Plenary Discussion Of The European Platform Tackling Undeclared Work, Colin C. Williams

Colin C Williams

The fourth Plenary meeting of the European Platform Tackling Undeclared Work was held in Brussels on 8-9 March 2018. The first day of this meeting was dedicated to the topic of the preventative approach towards tackling undeclared work, with a focus upon service vouchers and awareness raising. This report summarises the discussions at the meeting, drawing also on the forthcoming study on this topic which has been developed as part of the Platform’s work programme


2018 European Platform Undeclared Work Survey Report: Obstacles To Tackling Undeclared Work At The Cross-Border And National Levels, Bilateral And National Agreements, And Complaint Reporting Tools, Colin C. Williams Apr 2018

2018 European Platform Undeclared Work Survey Report: Obstacles To Tackling Undeclared Work At The Cross-Border And National Levels, Bilateral And National Agreements, And Complaint Reporting Tools, Colin C. Williams

Colin C Williams

Responses were received from 45 authorities with responsibilities for tackling undeclared work in 25 Member States (MS), most of whom were labour inspectorates or Ministries of Labour. The issues covered: obstacles to tackling undeclared work at the cross-border and national levels; the use of bilateral and multilateral agreements, and the use of complaint reporting tools in Member States


Elements Of A Preventative Approach Towards Undeclared Work: An Evaluation Of Service Vouchers And Awareness Raising Campaigns - Input Paper To Thematic Discussion, Colin C. Williams Apr 2018

Elements Of A Preventative Approach Towards Undeclared Work: An Evaluation Of Service Vouchers And Awareness Raising Campaigns - Input Paper To Thematic Discussion, Colin C. Williams

Colin C Williams

The objective of the thematic discussion on preventative measures for tackling undeclared work, focusing on both service vouchers and awareness raising campaigns, is (i) to exchange information on what works and what does not, (ii) to generate knowledge about these preventative measures, and (iii) to explore how the Platform activities can contribute to developing a preventative approach towards undeclared work.
This thematic discussion will focus attention on three key issues. In Part 1, we will address an issue everyone is aware of but until now has not been discussed, namely why preventative measures are not commonly used in Member States ...


Starting-Up Unregistered And Firm Performance In Turkey, Colin C. Williams Mar 2018

Starting-Up Unregistered And Firm Performance In Turkey, Colin C. Williams

Colin C Williams

Recent years have seen a questioning of the negative representation of
informal sector entrepreneurship and an emergent view that it may offer significant
benefits. This paper advances this rethinking by evaluating the relationship between
business registration and future firm performance. Until now, the assumption has been
that starting-up unregistered is linked to weaker firm performance. Using World Bank
Enterprise Survey data on 2494 formal enterprises in Turkey, and controlling for other
determinants of firm performance as well as the endogeneity of the registration
decision, the finding is that formal enterprises that started-up unregistered and spent
longer unregistered have significantly higher ...


An Evaluation Of The Scale Of Undeclared Work In The European Union And Is Structural Determinants: Estimates Using The Labour Input Method, Colin C. Williams, Josip Franic, Ioana Horodnic Dec 2017

An Evaluation Of The Scale Of Undeclared Work In The European Union And Is Structural Determinants: Estimates Using The Labour Input Method, Colin C. Williams, Josip Franic, Ioana Horodnic

Colin C Williams

On average, 11.6% of total labour input in the private sector in the EU is undeclared, and undeclared work constitutes on average 16.4% of gross value added (GVA) (the difference due to undeclared labour being concentrated in sectors with higher labour productivity).

These, however, are unweighted averages, and do not take into account the relative size of the labour force in each Member State. The weighted averages, therefore, are that 9.3% of total labour input in the private sector in the EU is undeclared, and undeclared work constitutes 14.3% of GVA in the private sector. The ...


European Platform Undeclared Work 2017 Platform Survey Report: Organisational Characteristics Of Enforcement Bodies, Measures Adopted To Tackle Undeclared Work, And The Use Of Databases And Digital Tools, Colin C. Williams Oct 2017

European Platform Undeclared Work 2017 Platform Survey Report: Organisational Characteristics Of Enforcement Bodies, Measures Adopted To Tackle Undeclared Work, And The Use Of Databases And Digital Tools, Colin C. Williams

Colin C Williams

This report presents the main findings of the first online survey of members of the European Platform Tackling Undeclared Work. A total of 23 Member States responded.

Organisational characteristics of enforcement bodies

Undeclared work covers paid activities that are lawful as regards their nature but are not declared to public authorities so as to evade either payment of taxes, social security contributions and/or labour laws. In three-quarters of Member States, responsibility for these three forms of evasion lies in separate public authorities, with each having separate targets and key performance indicators (KPIs). The outcome is a departmental ‘silos’ approach ...


Undeclared Economic Activities Of Croatian Companies Findings From A Representative Survey Of 521 Companies, Colin C. Williams Sep 2017

Undeclared Economic Activities Of Croatian Companies Findings From A Representative Survey Of 521 Companies, Colin C. Williams

Colin C Williams

This report presents the findings of a survey on undeclared economic practices undertaken by Croatian companies. In order to obtain the rigorous evidence on undeclared work in Croatia, we previously investigated citizens’ experiences with undeclared work and the practice of envelope wages. With this representative survey of 521 companies, we focus on frequency of company engagement in the undeclared economy.


Under-Declaring Work, Falsely Declaring Work: Under-Declared Employment In The European Union, Colin C. Williams, Ioana Horodnic Sep 2017

Under-Declaring Work, Falsely Declaring Work: Under-Declared Employment In The European Union, Colin C. Williams, Ioana Horodnic

Colin C Williams

Under-declared employment occurs when a formal employer pays a formal employee an official declared wage but also an additional undeclared (‘envelope’) wage in order to evade the full social insurance and tax liabilities owed. The aim of this study is to evaluate the prevalence, characteristics and distribution of this fraudulent wage practice in the EU28, to explain its existence, to provide an evidence-based evaluation of the effectiveness of different policy approaches for tackling it, and propose a set of policy recommendations.

Prevalence, characteristics and distribution of under-declared employment
To evaluate the prevalence, characteristics and distribution of under-declared employment in the ...


Tackling Undeclared Work In Southeast Europe: Knowledge-Informed Policy Responses, Colin C. Williams Aug 2017

Tackling Undeclared Work In Southeast Europe: Knowledge-Informed Policy Responses, Colin C. Williams

Colin C Williams

Ø  Undeclared work is socially accepted and widely practiced in Bulgaria, Croatia, and the FYR of Macedonia.
 
Ø  More than 1 in 5 adults in these countries acknowledge that they have bought goods and services on the undeclared economy in the prior year. More than 1 in 12 report that they have undertaken undeclared work, and more than 1 in 10 declared employees report that they receive from their employer in addition to their declared salary an additional undeclared ‘envelope’ wage.
 
Ø  But undeclared work differs across and within the three countries. For every one working undeclared due to their ...


Greypolicybrief2_Macedonia.Pdf, Colin C. Williams, Peter Rodgers, Ruslan Stefanov Aug 2017

Greypolicybrief2_Macedonia.Pdf, Colin C. Williams, Peter Rodgers, Ruslan Stefanov

Colin C Williams

KEY POINTS
Ø  Undeclared work hasdeep roots in FYR of Macedonia. 1 in 16 adults and 1 in 8 of the employed engage in undeclared work. The use of informal connections to circumvent formal institutions is practiced by 35% of Macedonians.
Ø  Formal institutions in the country are underdeveloped. Unemployment also remains unusually high compared with the EU average.
Ø  The traditional repression approach to tackling undeclared work, which has been prioritised so far by the authorities, is ineffective.
Ø  Increasing penalties and surveillance/ control should at the very least be supplemented by public awareness raising campaigns, educating citizens, and ...


Illegitimate Economic Practices In Bulgaria: Findings From A Representative Survey Of 2,005 Citizens, Colin C. Williams, Junhong Yang Jul 2017

Illegitimate Economic Practices In Bulgaria: Findings From A Representative Survey Of 2,005 Citizens, Colin C. Williams, Junhong Yang

Colin C Williams

This report presents the findings of a survey on illegitimate economic practices in Bulgaria conducted between July and October 2015. This representative survey of 2005 citizens focused on the experiences of Bulgarians with undeclared work, envelope wages and the practice of “pulling strings”, as well as on their opinion about these types of dishonest behaviour.
According to the respondents, illegitimate economic practices are strongly ingrained in Bulgarian society. According to the estimation of Schneider (2013), the undeclared economy accounts for 31% of GDP in Bulgaria in 2013, which is the highest estimation for any country in the EU-28. According to ...


Tackling Undeclared Work In The Construction Industry: A Learning Resource, Colin C. Williams Jul 2017

Tackling Undeclared Work In The Construction Industry: A Learning Resource, Colin C. Williams

Colin C Williams

On 3 May 2017, the European Platform Tackling Undeclared Work organised a seminar in Brussels on Tools and approaches to deal with undeclared work in the construction sector. The seminar brought together Platform members and observers from 21 EU Member States (MS) and Norway (EEA) representing labour inspectorates and social security, tax and customs authorities, as well as national and European social partner representatives from the construction sector. 
This learning resource paper describes the seminar outcomes. The first section looks at the extent and nature of undeclared work in the construction sector. This is followed by an overview of the ...


Illegitimate Economic Practices In Fyr Macedonia, Colin C. Williams, Slavko Bezeredi May 2017

Illegitimate Economic Practices In Fyr Macedonia, Colin C. Williams, Slavko Bezeredi

Colin C Williams

This report presents the findings of a survey on illegitimate economic practices in FYR Macedonia conducted between August and October 2015. This representative survey of 2,014 citizens focused on their experiences with undeclared work, envelope wages and the practice of ‘pulling strings’, as well as on their opinion about these types of non-compliant behaviour.
According to the respondents, non-compliant practices are strongly ingrained in Macedonian society. Some 35% use personal connections in order to circumvent rules and procedures, 17.7% purchase undeclared goods and services, 6.1% work in the undeclared economy and 13% of employees receive envelope wages ...


Assessing The Cross-National Transferability Of Policy Measures For Tackling Undeclared Work, Colin C. Williams, Rositsa Dzhekova, Marijana Baric, Josip Franic, Lyubo Mishkov Aug 2014

Assessing The Cross-National Transferability Of Policy Measures For Tackling Undeclared Work, Colin C. Williams, Rositsa Dzhekova, Marijana Baric, Josip Franic, Lyubo Mishkov

Colin C Williams

The aim of the present Working Paper No. 5 is to provide a preliminary assessment of the appropriateness of possible policy approaches for tackling undeclared work as well as their transferability to three target countries: Bulgaria (BG), Croatia (HR) and FYR Macedonia (FYROM). This assessment will result in highlighting a set of promising policy practices that can be tested empirically in terms of their acceptability among the population and stakeholders in the three Southeast European states.


The Shadow Economy, Colin C. Williams, Friedrich Schneider May 2013

The Shadow Economy, Colin C. Williams, Friedrich Schneider

Colin C Williams

No abstract provided.


Tackling Undeclared Work In Turkey, Colin C. Williams, Marijana Baric, Piet Renooy May 2013

Tackling Undeclared Work In Turkey, Colin C. Williams, Marijana Baric, Piet Renooy

Colin C Williams

No abstract provided.


Tackling Undeclared Work In Croatia, Colin C. Williams, Marijana Baric, Piet Renooy May 2013

Tackling Undeclared Work In Croatia, Colin C. Williams, Marijana Baric, Piet Renooy

Colin C Williams

No abstract provided.


Beyond The Formal Economy: Evaluating The Level Of Employment In Informal Sector Enterprises In Global Perspective, Colin C. Williams Dec 2012

Beyond The Formal Economy: Evaluating The Level Of Employment In Informal Sector Enterprises In Global Perspective, Colin C. Williams

Colin C Williams

The aim of this paper is to evaluate the varying level of employment in informal sector enterprises
across the globe and to undertake an exploratory analysis of the wider economic and social conditions
associated with greater levels of informalization. Examining International Labor Organization surveys
conducted in 43 countries, the finding is that the main job of just under one in three (31.5 percent) nonagricultural
workers is in an informal sector enterprise. Conducting an exploratory analysis of the
correlation between countries with higher levels of employment in informal sector enterprises and
economic under-development (‘modernization’ thesis), higher taxes, corruption and state ...