Eliciting permanent and transitory undeclared work from matched administrative and survey data

Péter Elek and János Köllő ()
Additional contact information
János Köllő: Hungarian Academy of Sciences (MTA KRTK)

Empirica, 2019, vol. 46, issue 3, No 10, 547-576

Abstract: Abstract We study the undeclared work patterns of Hungarian employees in relatively stable jobs, using a panel dataset that matches individual-level self-reported Labour Force Survey data with administrative records of the Pension Directorate for 2001–2006. We estimate the determinants of undeclared work using Heckman-type random-effects panel probit models, and develop a two-regime model to separate permanent and transitory undeclared work, where the latter follows a Markov chain. We find that about 6–7% of workers went permanently unreported for six consecutive years, and a further 4% were transitorily unreported in any given year. The models show lower reporting rates—especially in the permanent segment—among males, high-school graduates, those in agriculture and transport, small firms and various forms of atypical employment. Transitory non-reporting may be partly explained by administrative records missing for technical reasons. The results suggest that (1) the “aggregate labour input method” widely used in Europe can indeed be a simple yet reliable tool to estimate the size of informal employment, although it slightly overestimates the true magnitude of black work and (2) the long-term pension consequences of undeclared work may be substantial because of the high share of permanent non-reporting.

Keywords: Undeclared work; Labour input method; Matched administrative-survey data; Random-effects panel probit with endogenous selection; Markov chain (search for similar items in EconPapers)
JEL-codes: C23 C25 H26 J46 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://link.springer.com/10.1007/s10663-018-9403-0 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
Working Paper: Eliciting Permanent and Transitory Undeclared Work from Matched Administrative and Survey Data (2017)
Working Paper: Eliciting permanent and transitory undeclared work from matched administrative and survey data (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:empiri:v:46:y:2019:i:3:d:10.1007_s10663-018-9403-0

Ordering information: This journal article can be ordered from
http://www.springer. ... ration/journal/10663

DOI: 10.1007/s10663-018-9403-0

Access Statistics for this article

Empirica is currently edited by Fritz Breuss and Fritz Breuss

More articles in Empirica from Springer, Austrian Institute for Economic Research, Austrian Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().