Explaining Cross-National Variations in the Prevalence and Character of Undeclared Employment in the European Union

Williams, Colin C.

doi:10.1515/esrp-2015-0008

Cited by 6 publications

(3 citation statements)

References 33 publications

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“…As such, it calls for greater levels of state intervention. In recent years evaluations of the cross-national variations in the size of the informal economy have supported the state under-intervention thesis, revealing that the informal economy is smaller in countries with higher taxes and levels of state expenditure, and lower levels of inequality (Williams, 2014b, c, 2015a, b, c; Williams and Horodnic, 2016; Williams and Martinez-Perez, 2014). Here, therefore, and to test whether a similar finding is valid in relation to cross-national variations in tax morale, we can evaluate the following hypotheses.…”

Section: Tax Morale: a Review Of The Literature And Hypotheses Developmentmentioning

confidence: 97%

Evaluating the individual- and country-level variations in tax morale

Williams

Krasniqi

2017

JES

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PurposeRecently, a small but burgeoning literature has argued that tax non-compliance cannot be fully explained using the conventional rational economic actor approach which views non-compliance as occurring when the pay-off is greater than the expected cost of being caught and punished. Instead, a social actor approach has emerged which views tax non-compliance as higher when 'tax morale', defined as the intrinsic motivation to pay taxes, is low. To advance this social actor model, the aim of this paper is to evaluate the individual and national heterogeneity in tax morale, which is crucial if tax compliance is to be improved. MethodologyTo do this, we report data from the 2010 Life in Transition Survey (LiTS) on tax morale in 35 Eurasian countries. FindingsLogit econometric analysis reveals on the one hand, that there is higher tax morale among middle-aged, married, home owners with children, with a university degree and employed, and on the other hand, that there is higher tax morale in more developed countries with stronger legal systems and less corruption, and higher levels of state intervention in the form of both taxation and expenditure. Research implications2 Rather than continue with the rational actor approach, this paper reveals how an emergent social actor approach can help to more fully explain tax non-compliance and results in a different policy approach focused upon changing country-level economic and social conditions associated with low tax morale and thus non-compliance. Practical implicationsThese results display the specific populations with low tax morale which need targeting when seeking to tackle tax non-compliance. Originality/valueThis paper provides a new way of explaining and tackling tax non-compliance in Eurasian countries.

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Section: Tax Morale: a Review Of The Literature And Hypotheses Developmentmentioning

confidence: 97%

Evaluating the individual- and country-level variations in tax morale

Williams

Krasniqi

2017

JES

Self Cite

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“…The literature on informality is ample and diversified but a few internally coherent theoretical approaches can be identified (Gërxhani, 2004a;Williams, 2015;Rekhviashvili, 2016). The dualist perspective predominantly explains the emergence of the informal sector as the result of underdevelopment.…”

Section: Debating Informal Employmentmentioning

confidence: 99%

“…The neoliberal approach, instead, frames informalization as a rational response of economic actors to overburdening red-tape and inefficient public regulations (De Soto, 1989;Loayza et al, 2005). Both approaches have failed to explain informality persistence vis-à-vis economic growth and/or neoliberal transformation (see: Vanek et al, 2014;Williams, 2015).…”

Section: Debating Informal Employmentmentioning

confidence: 99%

Manufacturing informality. Global production networks and the reproduction of informalized labour regimes in Europe’s peripheries

Bagnardi

2023

European Journal of Industrial Relations

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This paper investigates the drivers of informal employment persistence in Global Production Networks. Building on a structuralist perspective, it reframes informalization as a tool of labour control and argues that informalization – while influenced by structural economic pressures and local socio-institutional contexts – is ultimately shaped by the employer-employee relations at the workplace. Drawing on Global Production Networks analysis and Labour Process Theory, the paper builds a novel extended structuralist approach to investigate the reproduction of informalization in the garment-footwear production networks in Italy and Albania. Through a multi-sited qualitative fieldwork, the paper shows that informalization dynamics persist as a response to competitive structural pressures only as long as workers are unable or unwilling to resist them. Yet, the situated bargaining power relations at each node of the chain crucially determine the predominant forms of informalization leading to either coercive and despotic, or hegemonic and negotiated, informalized workplace regimes.

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Cross-country variations in the participation of small businesses in the informal economy

Williams

Horodnic

2016

Journal of Small Business and Enterprise Development

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Purpose – The purpose of this paper is to advance a new explanation for cross-country variations in the participation of small businesses in the informal economy. Drawing upon institutional theory, it proposes that the greater the asymmetry between the codified laws and regulations of formal institutions (state morality) and the unwritten socially shared rules of informal institutions (civic morality), the greater is the propensity of small businesses to participate in the informal economy. To analyse this, the extent to which small businesses evade payroll taxes by paying employees an undeclared (envelope) wage in addition to their official declared salary is analysed. Design/methodology/approach – To evaluate this, data are reported from a 2013 Eurobarometer survey involving 5,174 face-to-face interviews with employees in small businesses across the 28 member states of the European Union (EU-28). Findings – The finding is that small businesses display a greater propensity to engage in this informal wage practice in countries where there is a higher degree of asymmetry between the codified laws and regulations of formal institutions (state morality) and the unwritten socially shared rules of informal institutions (civic morality). A multi-level logistic regression analysis reveals these to be countries which have lower qualities of governance, lower levels of taxation and intervention in the labour market and less effective social transfer systems. Research limitations/implications – The major limitation of this study is that it has only examined whether employees in small businesses receive informal wages. Future cross-country surveys should analyse a wider range of ways in which small businesses participate in the informal economy such as under-reporting turnover. Originality/value – This is the first known analysis of cross-country variations in the participation of small businesses in the informal economy.

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Explaining Cross-National Variations in the Prevalence and Character of Undeclared Employment in the European Union

Cited by 6 publications

References 33 publications

Evaluating the individual- and country-level variations in tax morale

Evaluating the individual- and country-level variations in tax morale

Manufacturing informality. Global production networks and the reproduction of informalized labour regimes in Europe’s peripheries

Cross-country variations in the participation of small businesses in the informal economy

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