Beyond the formal/informal jobs divide: evaluating the prevalence of hybrid ‘under-declared’ employment in south-eastern Europe

What is it about?

To evaluate critically the recurring assumption that a job is either formal or informal, but never simultaneously both, this paper uncovers how in south-eastern Europe many formal employees receive not only a declared wage from their formal employer but also an additional undeclared (‘envelope’) wage.

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Why is it important?

Reporting a 2007 EU-wide survey comprising 26,659 face-to-face interviews, some 1 in 6 (16%) formal employees in south-east Europe are found to be in these hybrid ‘under-declared’ jobs receiving on average 60% of their gross salary as an envelope wage. Uncovering how, despite this employment arrangement being unevenly distributed across countries, employee groups and businesses, it is not confined to small pockets but is ubiquitous across the south-east European labour market and beyond, the paper then concludes by discussing the implications for both policy and theory of the existence of ‘under-declared’ formal employment.

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