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Evaluating cross‐national variations in the extent and nature of informal employment in the E uropean U nion
Author(s) -
Williams Colin C.
Publication year - 2013
Publication title -
industrial relations journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.525
H-Index - 3
eISSN - 1468-2338
pISSN - 0019-8692
DOI - 10.1111/irj.12030
Subject(s) - eurobarometer , redistribution (election) , informal sector , welfare , welfare state , labour economics , intervention (counseling) , economics , language change , state (computer science) , demographic economics , european union , political science , economic growth , economic policy , market economy , psychology , literature , algorithm , psychiatry , politics , computer science , law , art
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. 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. The paper concludes by exploring the theoretical and policy implications.