Illegal wages recipient percentage persistent

Photo: Marko Saarm / Sakala

Estonian Institute of Economic Research (EKI) says 11 percent of employees interviewed received «envelope wages» last year. In 2012 the percentage was 12.

At that, the amount of employees who got all of their pay unofficially almost doubled (to 19 percent). Therefore, the share of undeclared wages has risen to the average of 39 percent of yearly income.

Regarding the regularity of envelope wages, EKI research says that over the years the percentage of those occasionally receiving undeclared wages has been more volatile than that of those regularly paid unofficially, which has basically stayed the same.

As revealed by interviews of inhabitants, about 58 percent of envelope wage recipients were paid illegally from time to time; with the rest, it was a constant routine. In 2012, the «occasional» percentage was 60.

Illegal wages were most prevalent in construction, but also dominant in industry, agriculture, and transport. In July, a requirement will enter into force to register employees before they set to work – hopefully curbing the habit.

According to a separate 2013 study by EKI, 54 percent of those interviewed favoured products and services by official providers, with taxes paid. In 2012, the corresponding percentage was 51.

18 percent of respondents favoured cheaper options whether the taxes had been paid or not; 28 percent act both ways. In 2013, legal services and goods were most popular among those aged 30–49-aastased (59 percent of respondents) and the 65–74-olds (60 percent).

Regionally, grey economy has grown most in North-East Estonia where illegal goods and services were favoured by 36 percent of respondents – a 16 percent increase year-on-year.