Around 20 to 30 percent of the informal employees...

“Around 20 to 30 percent of the informal employees hold university degrees in countries such as Belgium, Cyprus, France, Greece, Israel, Romania, Russia, Ukraine and the UK, shows the report “In From the Shadow: integrating Europe’s informal labor,” published on Monday by the World Bank. The report states that Romania is among the countries where a substantial share of those employed informally is engaged in high-skill, non- manual work. The Czech Republic, Hungary and Slovenia are other countries where the brains remain in the shadows. One out of four employees without a contract works in organizations with 100 and more workers in Belgium, the Czech Republic, Denmark, Finland, Israel, Romania, Slovenia, and the UK.”

“Making these jobs and businesses economically viable in the formal sector means providing tax incentives for low-wage earners, like the US Earned Income Tax Credit, and designing smart safety nets that reward formal work, like the German Harz IV reforms. In addition, regulations need to strike the right balance between the protection that is afforded to workers and consumers and the flexibility that is afforded to employers,” said Koettl.
The report mentions that 10 percent of the employees active in 11 central and eastern European countries received envelope wages, but in different ratios across the region. Only 3 percent of the employees in the Czech Republic received envelope wages in the previous year. This figure stood at 5 percent in Slovenia and at 11 percent in Lithuania and Poland, while in Latvia it stood at 17 percent. The envelope method applied for 23 percent of the Romanian employees. In Romania, employees received about 70 percent of their wages in this manner, while in the other countries the share of the undeclared wage was lower.