The phenomenon of ‘undeclared work’ is known under a broad variety of different names. Terms such as ‘black work’, ‘informal economy’, ‘shadow economy’, ‘moonlighting’ and many others have been used to describe the phenomenon or parts of it.
For various reasons, knowledge of the extent of undeclared work within an economy is of considerable political interest. Undeclared economic activities are, on the one hand, unlawful behaviour creating considerable costs on several levels: tax authorities receive less revenue in the form of income tax or value added taxes; social security institutions do not get contributions and undeclared activities partly inhibit the creation of regular employment with full social protection. Yet on the other hand, undeclared work is part of the economy and its importance should therefore be estimated as accurately as possible.
The transformation of undeclared work into formal work is an important issue for the current employment policy of the European Commission. Transforming informal work into formal work can be an important step towards the fulfilment of the EU employment goals set out in the Lisbon strategy.
For the development of adequate policy measures which deal with undeclared work, it is important to have sufficient and comparable information not only about the extent, but also about the structure of undeclared work in the various countries of the European Union. Undeclared work has different faces in different countries in terms of the people who carry out undeclared work and their motivations for doing so. Political strategies have to take these differences into account.
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