OECD Employment Outlook 2004 Edition: Informal Employment and Promoting the Transition to a Salaried Economy

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Abstract:

"Informal" employment escapes taxation and regulation. Such forms of employment make it difficult to manage social protection; undermine tax collection, implying either high tax rates on those in formal employment or poor‐quality government services; involve unfair competition and inefficient production methods; and facilitate illegal migration. To what extent does undeclared work include household production, work helping out friends, work by illegal migrants, undeclared wages, "black market" transactions, tax evasion by the self‐employed, and the production of illicit goods? Do high taxes, red tape, poor‐quality government services and strict employment regulations exclude workers from formal employment, and how can the transition to a salaried economy be promoted?

Document Type: Review Article

Publication date: July 1, 2004

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