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Migration and the Shadow Economy
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OKKERSE Liesbet
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Affiliation: University Antwerp
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Keywords: Migration, Labour. Employment. Work.
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| Abstract: | This paper deals with the issue of illegal migration and the shadow economy in Europe.The decision to enter the shadow economy depends on a cost-benefit analysis weighing the risk of being caught versus the taxes evaded. OECD countries with the largest informal economies, also have the highest overall tax burden. Informal employment brings forth undeclared workers. A flourishing shadow economy attracts illegal migrants and their increase will stimulate the shadow economy. The informal economy becomes a pull factor for illegal migration. As long as there are economic incentives that lead to illegal employment of foreigners, illegal migration will not vanish. The only way to combat illegal migration is to combat the hiring of illegal migrants by reducing undeclared work in general. |
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Download paper
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