EconPapers    
Economics at your fingertips  
 

Eliciting Permanent and Transitory Undeclared Work from Matched Administrative and Survey Data

Peter Elek () and János Köll? ()
Additional contact information
Peter Elek: Eötvös Lorand University
János Köll?: Hungarian Academy of Sciences

No 10800, IZA Discussion Papers from Institute for the Study of Labor (IZA)

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 per cent of workers went permanently unreported for six consecutive years, and a further 4 per cent 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, various forms of atypical employment, and small firms. Transitory non-reporting may be partly explained by administrative records missing for technical reasons. The results suggest that (i) 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 (ii) the long-term pension consequences of undeclared work are substantial because of the high share of permanent non-reporting.

Keywords: random-effects panel probit with endogenous selection; matched administrative-survey data; labour input method; undeclared work; Markov chain (search for similar items in EconPapers)
JEL-codes: C23 C25 H26 J46 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-iue and nep-lma
Date: 2017-05
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://ftp.iza.org/dp10800.pdf (application/pdf)

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:izadps:dp10800

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute for the Study of Labor (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Mark Fallak ().

 
Page updated 2019-04-24
Handle: RePEc:iza:izadps:dp10800