Unregistered employment in service sector businesses

What is it about?

Although a voluminous literature exists on the prevalence of the informal economy, few studies evaluate unregistered employment and none its prevalence and distribution across the service industries. This paper fills that gap.

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Photo by Louis Hansel on Unsplash

Photo by Louis Hansel on Unsplash

Why is it important?

Reporting a 2015 European Working Conditions Survey based on 43,850 face-to-face interviews, the finding is that 7% (1 in 14) of service industry employees have no written contract of employment across the 35 European countries surveyed, although this varies from 34% in Cyprus to 1% in Sweden. A logistic regression analysis at the European level reveals significant associations between the propensity to work with no contract and various individual-, household- and firm-related characteristics, with unregistered employment more prevalent among women, younger people, those with fewer years in education, migrants, those living in households unable to make ends meet, those working in smaller businesses, and the hospitality and household service sectors. The theoretical and policy implications are then discussed.

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