Addressing the issue of undeclared work – Part I: Applying associative classification per the CRISP-DM methodology

Abstract

Addressing undeclared work is a high priority in the labor field for government policymakers since it adversely affects all involved parties and results in significant losses in tax and social security contribution revenues. In the last years, the wide use of ICT in labor inspectorates and the considerable progress in data exchange have resulted in numerous databases dispersed in various units, yet these are not effectively used to increase their functions productivity. This study presents a detailed analysis of a data mining project per the CRISP-DM methodology aiming to assist the labor inspectorates in dealing with undeclared work and other labor law violations. It uses real past inspections data merged with companies characteristics and their employment details and examines the application of two Associative Classification algorithms, the CBA and CBA2, in combination with two types of datasets, a binary and a four-class. The produced models are assessed per the data mining goals and per the initial business objectives, and the research concludes proposing an innovative inspections recommendation tool proved to offer two major benefits: a mechanism for planning targeted inspections of improved efficiency and a knowledge repository for enhancing the inspectors understanding of those features linked with labor law violations.