EconPapers    
Economics at your fingertips  
 

Cash wage payments in transition economies: Consequences of envelope wages

Ioana Horodnic

IZA World of Labor, 2016, No 280, 280

Abstract: In transition economies, a significant number of companies reduce their tax and social contributions by paying their staff an official salary, described in a registered formal employment agreement, and an extra, undeclared “envelope wage,” via a verbal unwritten agreement. The consequences include a loss of government income and a lack of fair play for lawful companies. For employees, accepting under-reported wages reduces their access to credit and their social protections. Addressing this issue will help increase the quality of working conditions, strengthen trade unions, and reduce unfair competition.

Keywords: envelope wages; informal employment; undeclared economy; tax evasion (search for similar items in EconPapers)
JEL-codes: J46 J48 O17 E26 (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (10) Track citations by RSS feed

Downloads: (external link)
http://wol.iza.org/articles/cash-wage-paymentsin-t ... envelope-wages-1.pdf (application/pdf)
http://wol.iza.org/articles/cash-wage-paymentsin-t ... es-of-envelope-wages (text/html)

Related works:
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:iza:izawol:journl:y:2016:n:280

Access Statistics for this article

IZA World of Labor is currently edited by Daniel S. Hamermesh

More articles in IZA World of Labor from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Bloomsbury Information Ltd ().

 
Page updated 2019-06-09
Handle: RePEc:iza:izawol:journl:y:2016:n:280