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Who Participates in the Undeclared Economy in South-Eastern Europe? An Evaluation of the Marginalization Thesis

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  • Colin C. Williams

    (University of Sheffield, U.K.)

  • Ioana A. Horodnic

    (Alexandru Ioan Cuza University of Iasi, Romania)

Abstract

To evaluate the "marginalization thesis" which posits that marginalized populations are more likely to engage in the undeclared economy, a 2013 Eurobarometer survey of six South-East European countries is analysed. Finding that some marginalized populations (e.g., those having difficulties paying household bills, the unemployed, younger people) are significantly more likely to participate in undeclared work, but others are not (e.g., poorer nations, women, those with fewer years in formal education, those living in rural areas), the outcome is a call for a more variegated and nuanced understanding of the marginalization thesis. The paper then discusses the theoretical and policy implications.

Suggested Citation

  • Colin C. Williams & Ioana A. Horodnic, 2015. "Who Participates in the Undeclared Economy in South-Eastern Europe? An Evaluation of the Marginalization Thesis," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 13(2), pages 157-175.
    • Handle: RePEc:seb:journl:v:13:y:2015:i:2:p:157-175
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    References listed on IDEAS

    as
    1. Colin C. Williams, 2014. "Confronting the Shadow Economy," Books, Edward Elgar Publishing, number 15370.
    2. Williams Colin, 2012. "Cross-National Variations in the Under-Reporting of Wages in South-East Europe: A Result of Over-Regulation or Under-Regulation?," South East European Journal of Economics and Business, Sciendo, vol. 7(1), pages 53-61, April.
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    10. Alm, James & Torgler, Benno, 2006. "Culture differences and tax morale in the United States and in Europe," Journal of Economic Psychology, Elsevier, vol. 27(2), pages 224-246, April.
    11. Colin C Williams, 2001. "Tackling the Participation of the Unemployed in Paid Informal Work: A Critical Evaluation of the Deterrence Approach," Environment and Planning C, , vol. 19(5), pages 729-749, October.
    12. Torgler, Benno, 2006. "The importance of faith: Tax morale and religiosity," Journal of Economic Behavior & Organization, Elsevier, vol. 61(1), pages 81-109, September.
    13. Gary Solon & Steven J. Haider & Jeffrey M. Wooldridge, 2015. "What Are We Weighting For?," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 301-316.
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    16. Lago-Peñas, Ignacio & Lago-Peñas, Santiago, 2010. "The determinants of tax morale in comparative perspective: Evidence from European countries," European Journal of Political Economy, Elsevier, vol. 26(4), pages 441-453, December.
    17. Colin C. Williams & Abbi Kedir & Meryem Fethi & Sara Nadin, 2012. "Evaluating 'Varieties of Capitalism' by the Extent and Nature of the Informal Economy: The Case of South-Eastern Europe," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 10(2), pages 113-130.
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    19. Kaitelidou, Daphne Ch. & Tsirona, Christina S. & Galanis, Petros A. & Siskou, Olga Ch. & Mladovsky, Philipa & Kouli, Eugenia G. & Prezerakos, Panagiotis E. & Theodorou, Mamas & Sourtzi, Panagiota A. &, 2013. "Informal payments for maternity health services in public hospitals in Greece," Health Policy, Elsevier, vol. 109(1), pages 23-30.
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    Cited by:

    1. Colin C. Williams & Slavko Bezeredi, 2018. "Evaluating Policy Approaches Towards Undeclared Work: Some Lessons from FYR of Macedonia," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 16(2), pages 171-187.
    2. Williams Colin C, 2019. "Explaining and tackling the informal economy: an evaluation of competing perspectives," Open Economics, De Gruyter, vol. 2(1), pages 63-75, January.
    3. Colin C Williams & Slavko Bezeredi, 2017. "Explaining Consumers’ Motives for Purchasing from the Informal Economy: Some Lessons from a Study of Bulgaria, Croatia and FYR of of Macedonia," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 4, pages 515-531, December.
    4. Williams Colin C. & Yang Junhong, 2017. "Evaluating the Use of Personal Networks to Circumvent Formal Processes: A Case Study of Vruzki in Bulgaria," South East European Journal of Economics and Business, Sciendo, vol. 12(1), pages 57-67, April.

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    More about this item

    Keywords

    Informal Economy; Underground Sector; Shadow Economy; Marginalized; Baltic region;
    All these keywords.

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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