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<p>The informal economy, often characterized by unregulated and untaxed economic activities, has significant yet understudied implications for sustainable development and inclusivity. This paper explores the influence of the size of the shadow economy and undeclared work patterns (envelope wage, without a formal contract and bogus self-employed) on the Leave No One Behind Index and the Sustainable Development Index developed by the United Nations across European countries from 2000 to 2021. Employing panel data regression models, the research investigates the differential impacts of informality on these indices, revealing a negative correlation with the informal economy and a positive association with various forms of undeclared work. The analysis, comprising 18 models segmented by region – Central and Eastern Europe, Western Europe, and Europe – demonstrates that the adverse effects of the informal economy are more pronounced, whereas the positive contributions of undeclared work patterns are subtler, yet significant. The study’s findings suggest a complex interaction between informal economic activities and sustainable development goals, challenging the conventional perspective on informality and its role in inclusive development. The results indicate that while the shadow economy may hinder broad development efforts, informal labor arrangements support vulnerable populations, underscoring the need for nuanced policy interventions that recognize the multifaceted nature of work and its impacts on development.</p>
</abstract>

The informal economy, often characterized by unregulated and untaxed economic activities, has significant yet understudied implications for sustainable development and inclusivity. This paper explores the influence of the size of the shadow economy and undeclared work patterns (envelope wage, without a formal contract and bogus self-employed) on the Leave No One Behind Index and the Sustainable Development Index developed by the United Nations across European countries from 2000 to 2021. Employing panel data regression models, the research investigates the differential impacts of informality on these indices, revealing a negative correlation with the informal economy and a positive association with various forms of undeclared work. The analysis, comprising 18 models segmented by region – Central and Eastern Europe, Western Europe, and Europe – demonstrates that the adverse effects of the informal economy are more pronounced, whereas the positive contributions of undeclared work patterns are subtler, yet significant. The study’s findings suggest a complex interaction between informal economic activities and sustainable development goals, challenging the conventional perspective on informality and its role in inclusive development. The results indicate that while the shadow economy may hinder broad development efforts, informal labor arrangements support vulnerable populations, underscoring the need for nuanced policy interventions that recognize the multifaceted nature of work and its impacts on development.

Informality and Inclusion: Assessing the effects of the Shadow Economy and informal labour in Europe

Management & Marketing

This work is licensed under the Creative Commons Attribution 4.0 International License.

The informal economy, often characterized by unregulated and untaxed economic activities, has significant yet understudied implications for sustainable...

Informality and Inclusion: Assessing the effects of the Shadow Economy and informal labour in Europe

Publié en ligne: 13 juil. 2024

Pages: 307 - 335

DOI: https://doi.org/10.2478/mmcks-2024-0014

Mots clés
informality, sustainable development, leave no one behind, informal workers, panel data

© 2024 Adriana AnaMaria Davidescu et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Informality and Inclusion: Assessing the effects of the Shadow Economy and informal labour in Europe

Publié en ligne: 13 juil. 2024

Pages: 307 - 335

DOI: https://doi.org/10.2478/mmcks-2024-0014

Mots clésinformality, sustainable development, leave no one behind, informal workers, panel data

© 2024 Adriana AnaMaria Davidescu et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Mots clés
informality, sustainable development, leave no one behind, informal workers, panel data