In Europe, the education profile of formal employees differs significantly from that of noncontributing employees, according to the survey In From the Shadow, published recently by the World Bank.
“Across Europe, people who have only completed basic education are more likely to be informally employed. Yet the pattern is far more pronounced in southern and western European countries than among the new members from the East. In the new member states most of those employed informally (about two-thirds) have completed secondary education,” reads the research.
In several European countries, such as Romania, France, Greece, Israel, Russia and the UK, between 20% and 30% of informal employees hold university degrees. In Romania, the Czech Republic, Hungary and Slovenia, a significant share of noncontributing employees do high-skill, non-manual work.
According to a European Commission survey, cited by the World Bank, most of informal employees in countries that recently joined the European Union said salaries in the regulated sector are too low. In Hungary and Lithuania, about 30% to 35% of respondents mentioned taxes as the most important reason for undeclared work, while taxes were the most important factor for less than 10% of respondents in Slovenia, Romania, Slovakia, and Bulgaria.