Business Law, Public Responsibility, and Ethics | Open Access Articles

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 interference …

This article reveals how many formal employees in the European Union

receive from their formal employer not only a declared wage but also an undeclared

“envelope wage”. Reporting the results of a 2007 survey involving

26,659 face-to-face interviews, the authors find that one in 18 formal employees

receives an envelope wage from their formal employer, amounting to 25 per cent

of their gross pay on average. Such hybrid wage arrangements are ubiquitous,

but are more common in some countries, employee categories and types of firm

than others. The authors conclude by discussing the theoretical and policy implications

of these findings.

The aim of this introductory article is to provide a critical overview of

how informality has been defined and measured, together with selected findings

on its extent and character, and a summary of competing views regarding its role

in contemporary economies and how it can be tackled. The outcome is a set of

conceptual frameworks for understanding both the burgeoning literature on informal

employment and how each of the perspectives presented in this Special Issue

contributes to the advancement of knowledge on this subject so as to set the scene

for the articles that follow.

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