Results have been published of a recent survey carried out by the Polish Central Statistical Office (Glówny Urzad Statystyczny, GUS [1]). The survey sample covers almost 24,000 Poles and is representative of the population aged 15 years and over. The study was carried out in the last quarter of 2004 along with the /Labour Force Survey/, using an additional questionnaire. It is the third consecutive study on the subject of unregistered work in Poland; previous surveys were conducted in 1995 and 1998.[1] http://www.stat.gov.pl/
More than twice as many men as women carry out unregistered work in Poland. Moreover, some 63% of those in undeclared work state that it is their main job. Education is an important factor in take-up of illegal work, while age also plays a role. These are among the findings of a 2004 survey by the Polish Central Statistical Office, the results of which were published in late 2005. The study covers various aspects of the informal labour market, including opinions on reasons for undertaking illegal employment.
About the survey
Results have been published of a recent survey carried out by the Polish Central Statistical Office (Glówny Urzad Statystyczny, GUS). The survey sample covers almost 24,000 Poles and is representative of the population aged 15 years and over. The study was carried out in the last quarter of 2004 along with the Labour Force Survey, using an additional questionnaire. It is the third consecutive study on the subject of unregistered work in Poland; previous surveys were conducted in 1995 and 1998.
Definition of undeclared work
‘Undeclared work’ is either employment without any formal contract or self-employment that is not registered with the tax authorities. Undeclared work generally means that social security and health insurance contributions and income tax will not be paid.
Facts and figures about undeclared work
The survey provides an overview of the extent and nature of the informal labour market in Poland (see Table).
| 2004 | ||
|---|---|---|
| Real numbers | (%) | |
| Total number of unregistered employees | 1,317,000 | 100 |
| Perform undeclared work as the main job | 829,000 | 63 |
| Perform undeclared work as an additional job | 488,000 | 37 |
| Women | 485,000 | 37 |
| Men | 832,000 | 63 |
| Live in an urban area | 685,000 | 52 |
| Live in a rural area | 632,000 | 48 |
| Age: | ||
| 15–24 years | 270,000 | 20 |
| 25–34 years | 322,000 | 24 |
| 35–44 years | 290,000 | 22 |
| 45–59 years | 384,000 | 29 |
| 60 years and above | 52,000 | 4 |
| Level of education: | ||
| Secondary or less (primary or middle school) | 317,000 | 24 |
| Vocational | 590,000 | 45 |
| Upper secondary (high school) | 331,000 | 25 |
| Third level (university) | 79,000 | 6 |
| Average income per worker (in PLN)* | 390 | 100 |
| Average income for men | 423 | 108 |
| Average income for women | 337 | 86 |
| Households using undeclared work | 1,019,000 | 100 |
* Exchange rate at the end of 2004 was €1.00 = PLN 4.08
Source: Undeclared work in Poland in 2004, GUS, 2005
In 1998, the number of unregistered workers amounted to 1.431 million (or 9.3% of the total working population at the time the survey was conducted). In 2004, this figure dropped to 1.317 million (or 9.6% of the working population). Thus, despite a decline in real numbers, the proportion of unregistered workers has grown due to a decrease in the total workforce between 1998 and 2004.
Reasons for undertaking undeclared work
The interviewees were asked to give their opinions on what pushes people into the informal labour market. According to the respondents, the most important reasons for undertaking illegal employment are as follows:
lack of opportunities to find legal work (cited by 57% of interviewees);
difficult financial situation, including insufficient income to live (42%).
Other reasons featuring to a lesser extent included:
excessive social security contributions (19%);
employers offering higher pay when a job is not registered (16%);
fiscal burden discouraging workers from reporting their income to tax authorities (12%);
risk of losing some social security benefits, for example health insurance (7%).
Profile of unregistered workers
On average, the population of unregistered workers is divided equally between urban and rural areas.
In relation to the age of undeclared workers, the largest category consists of middle-aged workers (aged 45–59 years), who represent 29% of the total, while the presence of people at pre-retirement age (60 years and above) is marginal, at only 4% of the total.
There is a clear correlation between level of education and working in the informal job market. The majority of undeclared workers are either vocational school graduates or those who have completed secondary school at best (up to nine years of schooling), while people continuing education to third level constitute only 6% of the unregistered workforce.
Women in the informal labour market
Women remain a minority group within the unregistered workforce, as they account for only 37% of the total number of undeclared employees. The proportion of unregistered female workers varies significantly, depending on age group. In the 15–24 and 35–44 year age categories, the proportion of women in these groups is calculated at 39% and 42% respectively, which is slightly higher than in the overall unregistered labour force. However, the proportion of undeclared female workers in the 25–34 and 45–59 year age categories falls below the average, at 31% and 32% respectively.
Type of work and pay
Although 63% of the undeclared labour force stated that unregistered work was their ‘main job’, it still represents occasional work for short periods of time for most of these workers. As much as 25% of all unregistered workers covered by the survey (i.e. 330,000 people) do not work for more than five days per month, and the average amount of time actually worked in the illegal economy by a single worker amounted to 35 days a year.
The most popular types of undeclared work are in construction and services (20%), farming and gardening (19.5%) or services in the local neighbourhood (15%).
In most cases, undeclared work is used by individuals (households) (65%), private enterprises (22%) and private entrepreneurs (self-employed people) (12%).
The average monthly income of an unregistered worker amounts to PLN 390 (€95.50). It seems that men tend to earn more (PLN 423, or €103.67) than women (PLN 337, or €82.59). The top earners among undeclared workers are male urban dwellers, while the lowest earners are female workers regardless of their place of residence.
Households using unregistered work
In 2004, more than one million Polish households reported using undeclared workers. It appears that the average household employed illegal workers for a period of 13 days per year. Households most frequently employ illegal workers to carry out construction jobs or provide domestic help.
Commentary
According to this survey, a substantial number of Poles have experienced working in the illegal economy. Despite a decline in the number of unregistered workers since 1998, it is clear that the informal labour market still plays an important role in the national economy. Furthermore, it seems that all measures aimed at combating the informal labour market that have been introduced in recent years have failed. In addition, many unregistered workers are deprived of basic employee rights.
Reference
Undeclared work in Poland in 2004 (Praca nierejestrowana w Polsce w 2004r.), Central Statistical Office (Glówny Urzad Statystyczny, GUS), Warsaw, 2005.
Jan Czarzasty, Institute of Public Affairs and Warsaw School of Economics
Eurofound recommends citing this publication in the following way.
Eurofound (2006), Survey highlights extent of undeclared work, article.
