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Illegitimate wage practices in Eastern Europe: - The case of 'envelope wages'

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  • Colin. C. Williams

Abstract

To evaluate the prevalence in Eastern Europe of a little discussed illegitimate wage practice in which employers pay their formal employees both a declared wage and an undeclared ‘envelope wage’, an extensive survey involving 10,671 face-to-face interviews in eleven post-socialist societies is here reported. The finding is that 10 per cent of all employees received envelope wages during the last 12 months amounting on average to two-fifths of their gross annual wage. Revealing how although unevenly distributed, this wage practice is nonetheless ubiquitous throughout Eastern Europe, the paper concludes by briefly reviewing policy options for tackling this labour arrangement.

Suggested Citation

  • Colin. C. Williams, 2008. "Illegitimate wage practices in Eastern Europe: - The case of 'envelope wages'," Journal of East European Management Studies, Rainer Hampp Verlag, vol. 13(3), pages 253-270.
  • Handle: RePEc:rai:joeems:doi_10.1688/1862-0019_jeems_2008_03_williams
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    Cited by:

    1. repec:nwe:eajour:y:2017:i:3:p:333-351 is not listed on IDEAS
    2. Colin C. Williams, 2014. "Explaining cross-national variations in the prevalence of envelope wages: some lessons from a 2013 Eurobarometer survey," Industrial Relations Journal, Wiley Blackwell, vol. 45(6), pages 524-542, November.
    3. Putniņš, Tālis J. & Sauka, Arnis, 2015. "Measuring the shadow economy using company managers," Journal of Comparative Economics, Elsevier, vol. 43(2), pages 471-490.
    4. Abbi M Kedir & Meryem Duygun Fethi & Colin C Williams, 2011. "Evaluating tax evasion in the European Union: a case study of the prevalence and character of ‘envelope wage’ payments," Discussion Papers in Economics 11/33, Department of Economics, University of Leicester, revised Jun 2011.

    More about this item

    Keywords

    Envelope wages; informal economy; shadow sector; tax compliance; undeclared work; Eastern Europe;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General
    • P31 - Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

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