Explaining the undeclared work in Albania. An empirical research in Durres and Tirana

Abstract

Undeclared work is a widespread phenomenon that can be observed in all countries, both developed and developing countries. This form of employment with long-term negative consequences varies from one country to another, referring to its rate of spread and the forms and sectors of employment affected by such a phenomenon.

Albania, where the formal labour market coexists with the informal market, has widespread dissemination of undeclared work.

The high level of undeclared work in Albania is not easy to explain as this issue is not only of economic background. Several theories are trying to explain the reasons for the presence of undeclared work in different countries. Referring to the general socio-economic characteristics of Albania and other studies related to the Balkan countries, this paper tries to explain undeclared work (and especially the envelope wages) through empirical testing of institutional theory.

The purpose of this research is to highlight:

1. Characteristics of undeclared work in Albania.
2. Reasons for undeclared work in Albania.
3. Association between the prevalence of envelope wage and institutional asymmetry.