<abstract xmlns="http://www.w3.org/1999/xhtml"><p> The aim of this paper is to evaluate contrasting policy approaches towards undeclared work. To do so, evidence is reported from 1,000 face-to-face interviews conducted in Croatia during 2013. Logistic regression analysis reveals no association between participation in undeclared work and the perceived level of penalties and risk of detection, but a strong association between participation in undeclared work and the level of tax morality. It thus confirms recent calls for the conventional direct controls approach, which seeks to deter engagement in undeclared work by increasing the penalties and risk of detection, to be replaced by an indirect controls approach which seeks to improve tax morality so as to encourage greater self-regulation and a culture of commitment to compliance. The implications for theory and policy are then discussed.</p></abstract>

The aim of this paper is to evaluate contrasting policy approaches towards undeclared work. To do so, evidence is reported from 1,000 face-to-face interviews conducted in Croatia during 2013. Logistic regression analysis reveals no association between participation in undeclared work and the perceived level of penalties and risk of detection, but a strong association between participation in undeclared work and the level of tax morality. It thus confirms recent calls for the conventional direct controls approach, which seeks to deter engagement in undeclared work by increasing the penalties and risk of detection, to be replaced by an indirect controls approach which seeks to improve tax morality so as to encourage greater self-regulation and a culture of commitment to compliance. The implications for theory and policy are then discussed.

Tackling the Propensity towards Undeclared Work: Some Policy Lessons from Croatia

Professor of Public Policy Management School, University of Sheffield, UK

Marie Curie Research Fellow Management School, University of Sheffield, UK

South East European Journal of Economics and Business

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

The aim of this paper is to evaluate contrasting policy approaches towards undeclared work. To do so, evidence is reported from 1,000 face-to-face interviews...

Tackling the Propensity towards Undeclared Work: Some Policy Lessons from Croatia

Published Online: Aug 04, 2015

Page range: 18 - 31

DOI: https://doi.org/10.1515/jeb-2015-0003

© South East European Journal of Economics and Business

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.