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The Matrix of Romania’s Underground Economy. Working without Legal Documents

Author

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  • Condrea Elena

    () („Ovidius” University of Constanta, Romania Faculty of Economics Sciences)

Abstract

According to financial analysis conducted by the authorities, working without legal papers or "in black" is one of the main components of the underground economy matrix and one of the main crimes generating "dirty money". The most common manifestation of the "black" employment refers to under declared employment, which is exercised at the limit of the relevant laws, with negative repercussions both upon the state budget and health insurance budget and therefore the general consolidated budget. The causes of "black" employment are extremely varied, have a multifactorial determination and take the economic situation of the employee and employer at any given time, the level of their training and last but not least, the legal framework and enforcement regime. According to a recent World Bank study, 45% of Romanian employees receive at least part of their salary in an envelope, and as in the public sector there is no black or gray employment, that the private sector, at least 60% of employees receive money for which they do not pay taxes. In this study we tried to highlight some of the causes and factors that determine and influence at the same time "black" employment and features some of the manifestations of the informal economy in Romania.

Suggested Citation

  • Condrea Elena, 2012. "The Matrix of Romania’s Underground Economy. Working without Legal Documents," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(1), pages 467-472, May.
  • Handle: RePEc:ovi:oviste:v:xii:y:2012:i:12:p:467-472
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    More about this item

    Keywords

    “black” employment; tax evasion; underground economy.;

    JEL classification:

    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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