Informal Workers across Europe : Evidence from 30 European Countries
The European Social Survey data are used to analyze informal employment in 30 countries, focusing on employees without contracts and on informal self-employed workers (who are distinguished from formal workers). Overall the size of informal employm...
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20111213090401 http://hdl.handle.net/10986/3681 |
| Summary: | The European Social Survey data are used
to analyze informal employment in 30 countries, focusing on
employees without contracts and on informal self-employed
workers (who are distinguished from formal workers). Overall
the size of informal employment decreases from South to West
to East to North. However, working without a contract is
more prevalent in Eastern Europe than in the West, except
for Ireland, the United Kingdom, and Austria. Between 2004
and 2009, no cases were found when unemployment and
dependent informality rates in a country went up together,
suggesting that working without a contract is pro-cyclical
in Europe. The dependent informality rate is inversely
related to skills (measured by either schooling or
occupation). Both in Southern and in Western Europe, the
highest dependent informality rate is found among immigrants
from Central and Eastern Europe and the Former Soviet Union,
while in Eastern Europe this group is second after
minorities without immigrant background. In the Southern and
part of Western Europe, immigrants not covered by European
Union free mobility provisions are much more likely to work
without a contract than otherwise similar natives. The paper
provides evidence that exclusion and discrimination plays an
important role in pushing employees into informality, while
this seems not to be the case for informal self-employed
workers. Both on average and after controlling for a rich
set of individual characteristics, informal employees in all
parts of Europe are having the largest financial
difficulties among all categories of the employed
population (yet they fare much better than the unemployed
and discouraged), while informal self-employed workers are
at least as well off as formal employees. Finally, there is
a negative and significant effect of individual-level
satisfaction with the national government on the propensity
to work without a contract in Eastern Europe, as well as in
Western Europe. |
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