Isabella Biletta Research manager, WCIR Unit

Undeclared Work Definition ‘ Any paid activities that are lawful as regards their nature but not declared to the public authorities, taking into account the differences in the regulatory system of Member States ’ ( European Commission, 2007, p. 2; Eurofound, 2008, 2009 ) 2 3 broad types: UW within a formal or informal enterprise, or what might be termed undeclared waged employment. own-account UW for an enterprise or another client more socially embedded own-account UW

UW trends

Undeclared Economy as % of GDP2012 per country 4

Who is in UW? TotalUnemployedOther non Employed All Employed EU 274%9%3%5% Nordic11%9%20%12% Western4%6%4%5% East & Central5%12%3%7% Southern3%12%2% 5

Economic and social impact Work regime Not pursuing ALMPALMP Welfare regime Benefits compensation payments less widespread or relatively low/ average wage Unemployment benefits more widespread and /or level of benefits relatevely closer to the average wage Correlations/UW Unemployed more likely to be engaging in UW to secure a livelihood Unemployed not disproportionaly engaging in UW 6 Williams & Nadin 2012

Policy Approaches Approach Method Deterrence Improve detection Penalties Enabling compliance Preventative Curative Fostering commitment 7

Policy Approaches trends Common place/dominant approach Observations 2001Deterrence More improved detection than penalties Some national preventative measures 2003Punishing non compliance + Preventative measures Some curative measures too Measures ensuring great commitment /tax morality largely absent 2008Wider range of measures adopted 2010Deterrence measures Seaking improve detection + Preventative/curative and commitment approach 93% using penalties /sanctions Greater uptake 8

Policy Approaches trends Wider range of measures theoretically available but Very few countries used several of them ! Most of the time used of a relatevely narrow range of measures Ex: countries using targeted direct tax incentives, less than 1/3 use other curative measures Moreover very few are considered as effective Ex: commitment measures, campaigns are not considered effective (10% only) if used alone /rather than compliance 9

Detection measures Improving effectiveness of inspections New approaches Concentration ‘suspect sectors ‘ Coordinated inspections BE CzR DK PT SK ES RO LV PT SE SI NO IT EE Ensuring workers registered prior to commencing work Obligation to declare Identity cards AT BG IT SK SE IT LU NO SE CzR Simplifying complianceMost MS Technological interventionsCash registers Other schemes SE PL BE DK EL IT HU New categories of legitimate work DE mini jobs/2002 HU simplifying seasonal /casual/temp work (2010) Smoothing transitions to SE DE (Start up premium) 10

Curative measures TargetMeasuresCountries workersAmnistiesEU Level/ES Voluntary disclosure Tailored business supportReversed charges for VAT SE CY FI customersDirect taxSE DK FI Service VouchersIT (pilot scheme agr) 11

Commitment measures Awreness campaignsLT (2009) LV(2011) NO (2008) ‘Business to the rules’BG (2010) ‘Let’s stop UW’SI Campaings by and with SPConstruction SE/DE/FR 12

13 Thank You