Who Engages in Undeclared Work in Urban Europe? A Critical Evaluation of the Marginality Thesis

Abstract

The view that undeclared work is undertaken by marginalised populations (i.e., those groups relatively excluded from the formal labour market) is a core assumption of not only modernisation theory, which holds that undeclared work is conducted by and for marginal population at the ‘bottom of the pyramid’, but also political economy theory, which views contemporary capitalism to outsource and subcontract production to the undeclared economy where marginalised populations conduct such work as a survival strategy. Until now however, few extensive evaluations of the validity of this marginality thesis have been conducted in relation to urban environments. To fill this gap, this paper reports data from a 2013 cross-national survey of urban populations in 28 European member states. Using multilevel mixed-effects logistic regression analysis, this reveals that although some marginalised groups in urban Europe (those having difficulties paying their household bills and younger age groups) are significantly more likely to participate in undeclared work, others are not (the unemployed) and yet others (women and urban dwellers in less affluent European regions) are significantly less likely to participate. The outcome is a more variegated theorisation of which marginal groups participate in undeclared work in urban areas and the need for policy towards the undeclared economy to address this more nuanced understanding.