What is it about?

This article evaluates critically the contrasting explanations for the cross-national variations in the prevalence and nature of informal employment, which variously view such work as more prevalent in poorer, under-developed economies; driven by high taxes, corruption and state interference that lead workers to exit formal employment; or driven by inadequate state intervention leading to the exclusion of workers from formal employment and state welfare provision.

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Why is it important?

By analysing cross-national variations across the European Union in the size of informal employment using indirect measurement methods and in its varying character using evidence from a 2007 Eurobarometer survey, it was found that wealthier, less corrupt and more equal economies with higher levels of labour market intervention, social protection and redistribution via social transfers have lower levels of informal employment, much of which is conducted to exit formal employment.


This paper explores what policies are required to reduce informal employment in the EU27.

Professor Colin C Williams
University of Sheffield

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This page is a summary of: Evaluating cross-national variations in the extent and nature of informal employment in the European Union, Industrial Relations Journal, August 2013, Wiley, DOI: 10.1111/irj.12030.
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