The shadow economy, undeclared work and informal employment

Undeclared work represents a large share of the shadow economy, which also includes illegal economic activities that circumvent government regulations. The European Commission defines undeclared work as any paid activities that are lawful as regards their nature but not declared to public authorities. Obtaining reliable estimates of the share of undeclared work in an economy is, by the non-registered nature of the phenomenon, very difficult. Informal employment, or employees without contracts, was found to account for one in six employed persons in Europe in the European Social Surveys of 2008-2009. The estimates of undeclared work across Member States as measured by the European Observatory Review are presented in the map below, along with the estimated evolution of the size of the shadow economy in the period between 2003 and 2013. The European Commission has proposed the creation of a European Platform to enhance cooperation in tackling undeclared work.