Illegitimate wage practices in Eastern Europe: - The case of 'envelope wages'

Colin Williams

Journal of East European Management Studies, 2008, vol. 13, issue 3, 253 - 270

Abstract: To evaluate the prevalence in Eastern Europe of a little discussed illegitimate wage practice in which employers pay their formal employees both a declared wage and an undeclared ‘envelope wage’, an extensive survey involving 10,671 face-to-face interviews in eleven post-socialist societies is here reported. The finding is that 10 per cent of all employees received envelope wages during the last 12 months amounting on average to two-fifths of their gross annual wage. Revealing how although unevenly distributed, this wage practice is nonetheless ubiquitous throughout Eastern Europe, the paper concludes by briefly reviewing policy options for tackling this labour arrangement.

Keywords: Envelope wages; informal economy; shadow sector; tax compliance; undeclared work; Eastern Europe (search for similar items in EconPapers)
JEL-codes: J24 J31 M10 M20 P31 (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (4)

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