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Evaluating cross-national variations in envelope wage payments in East-Central Europe

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  • Colin C Williams

Abstract

This article seeks to explain the cross-national variations in the tendency of employers to under-declare salaries by paying formal employees an undeclared (‘envelope’) wage in addition to their official declared salary. Analysing the prevalence, size and nature of envelope wage payments across 10 East-Central European countries using data from a 2007 Eurobarometer survey, envelope wage payments are found to be less common, smaller and more likely to be for extra work in wealthier, less corrupt and more equal nations with higher levels of taxation, social protection and effective redistribution via social transfers. The theoretical and policy implications are then discussed.

Suggested Citation

  • Colin C Williams, 2015. "Evaluating cross-national variations in envelope wage payments in East-Central Europe," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 36(2), pages 283-303, May.
    • Handle: RePEc:sae:ecoind:v:36:y:2015:i:2:p:283-303
    DOI: 10.1177/0143831X13505120
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    References listed on IDEAS

    as
    1. Colin C. Williams & John Round, 2007. "Beyond Negative Depictions of Informal Employment: Some Lessons from Moscow," Urban Studies, Urban Studies Journal Limited, vol. 44(12), pages 2321-2338, November.
    2. repec:bla:germec:v:11:y:2010:i::p:109-149 is not listed on IDEAS
    3. Andreas Buehn & Friedrich Schneider, 2012. "Shadow economies around the world: novel insights, accepted knowledge, and new estimates," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(1), pages 139-171, February.
    4. Ted London & Stuart L Hart, 2004. "Reinventing strategies for emerging markets: beyond the transnational model," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(5), pages 350-370, September.
    5. Colin C. Williams, 2009. "Illegitimate Wage Practices in Central and Eastern Europe: A Study of the Prevalence and Impacts of “Envelope Wages”," Journal of Contemporary Central and Eastern Europe, Taylor & Francis Journals, vol. 17(1), pages 65-83.
    6. Williams Colin, 2009. "Evaluating the Extent and Nature of ‘Envelope Wages’ in the European Union: A Geographical Analysis," European Spatial Research and Policy, Sciendo, vol. 16(1), pages 115-129, June.
    7. Lars P. Feld & Friedrich Schneider, 2010. "Survey on the Shadow Economy and Undeclared Earnings in OECD Countries," German Economic Review, Verein für Socialpolitik, vol. 11(2), pages 109-149, May.
    8. Packard, Truman G., 2007. "Do workers in Chile choose informal employment? A dynamic analysis of sector choice," Policy Research Working Paper Series 4232, The World Bank.
    9. John Round & Colin C. Williams & Peter Rodgers, 2008. "Corruption in the post-Soviet workplace: the experiences of recent graduates in contemporary Ukraine," Work, Employment & Society, British Sociological Association, vol. 22(1), pages 149-166, March.
    10. Colin. C. Williams, 2008. "Illegitimate wage practices in Eastern Europe: - The case of 'envelope wages'," Journal of East European Management Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 13(3), pages 253-270.
    11. Friedrich Schneider & Andreas Buehn & Claudio Montenegro, 2010. "New Estimates for the Shadow Economies all over the World," International Economic Journal, Taylor & Francis Journals, vol. 24(4), pages 443-461.
    12. Jaanika Meriküll & Karsten Staehr, 2010. "Unreported Employment and Envelope Wages in Mid-Transition: Comparing Developments and Causes in the Baltic Countries," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 52(4), pages 637-670, December.
    13. Rainer Neef, 2002. "Aspects of the Informal Economy in a Transforming Country: The Case of Romania," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 26(2), pages 299-322, June.
    Full references (including those not matched with items on IDEAS)

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