Revisiting the undeclared service economy as a dual labour market: lessons from a 2019 Eurobarometer survey

Abstract

The aim of this paper is to transcend the long-standing depiction that workers universally participate in the undeclared service economy out of necessity due to their exclusion from the formal labour market, by proposing and evaluating the existence of a dual undeclared labour market in the service sector composed of an ‘upper-tier’ of voluntary exit-driven and ‘lower-tier’ of exclusion-driven undeclared service sector workers. Reporting a 2019 Eurobarometer survey conducted in 28 European countries, a dual labour market in the undeclared service economy is validated. Three-quarters of undeclared service workers report either purely exit- or exclusion driven rationales. For every lower tier undeclared service worker, 6.7 are in the upper tier, with those in the voluntary exit-driven upper tier more likely to be older, self-employed, having spent time in full-time education, and to be living in Western Europe and Nordic countries. The theoretical and policy implications are then discussed.