Exploring the illegal practice of under-reporting wages in the construction industry: some lessons from Romania

Abstract

The aim of this paper is to evaluate the practice of under-reporting wages (and its multifarious forms) in the construction industry, which is a dominant type of undeclared work found in the industry, and how it can be explained and tackled. To do so, a mixed methods approach is used, including in-depth interviews, focus groups and a representative national survey comprising 1,212 respondents collected during April-May 2021 in Romania, a country with one of the highest shares of undeclared work in the European Union. A logistic regression analysis shows that this practice is not confined to vulnerable groups but is rather an extensive phenomenon. Evaluating how wage under-reporting could be tackled, the finding is that there is no significant relationship between how employees perceive the level of sanction and the risk of detection and their likelihood of participating in wage under-reporting. However, the results reveal the significance of social norms; those who have acquaintances who receive under-reported wages are more likely to engage themselves in this wage arrangement. The implications for theory and practice are then considered.

Informal payments by patients, institutional trust and institutional asymmetry

“…The proposed aim of this paper has been to advance understanding of institutional theory by evaluating if its framework is appropriate for explaining variations across the EU-level in informal payments. While the institutional asymmetry explanation has been previously evaluated in other contexts (e.g., construction services; Horodnic et al, 2022b ) and regions (e.g., Central and Eastern Europe or South-eastern Europe; Williams and Horodnic, 2018a , b ) and the role of trust in shaping consumer and patient behavior has been extensively evaluated in literature ( Kukutschka, 2021 ; Pop et al, 2022 ), the institutional trust explanation (trust in institutions) is rarely evaluated as a determinant of informal payments by patients. As such, the influence of institutional trust and institutional asymmetry as determinants of such payments is tested for the first time across all 27 EU countries.…”