Beyond the marginalization thesis: evaluating the participation of the formally employed in the shadow economy in the European Union. Issue 3 (8th August 2016)

• Record Type: Journal Article
• Authors: Williams, Colin C; Horodnic, Ioana Alexandra
• Editors: Bahmani-Oskooee, Mohsen
• Is Part Of: Journal of economic studies. Volume 43:Issue 3(2016)
• Publication Date: 2016-08-08
• Subjects: Economics -- Periodicals; 330.05
• DOI: 10.1108/JES-06-2014-0105
• Languages: English
• ISSNs: 0144-3585

Abstract

Abstract : Purpose: Grounded in an emergent recognition that those people in formal employment conduct the vast majority of work in the shadow economy, the aim of this paper is to evaluate for the first time the degree to which shadow work is conducted by those in formal jobs and the characteristics of those in formal employment who participate in the shadow economy. Design/methodology/approach: To do this, we report a 2007 survey of participation in the shadow economy involving 26, 659 face-to-face interviews conducted in 27 European Union (EU) member states. Findings: The finding is that in the European Union, the formally employed undertake a disproportionate share of work in the shadow economy. Analysing the characteristics of the employed most likely to work in the shadow economy however, it is those who benefit least from the formal economy, namely younger unmarried men and on lower-incomes living in rural areas, working in the construction sector and in small firms. Research limitations/implications: The outcome is a tentative call for recognition that although people in formal employment conduct the vast majority of work in the shadow economy, these are mostly particular vulnerable and weaker groups of the formally employed. Whether similar findings prevail at other spatial scales and in other global regions now needs investigating. Practical implications: This survey displays the need for policy not to target the unemployed but particular groups of the formally employed. Originality/value: The first extensive evaluation of the extent to which shadow work is conducted by those in formal jobs and the characteristics of those in formal employment who participate in the shadow economy.