Determinants Of The Romanian Households' Informal Economy

The informal sector consists of productive units characterised by a low level of organisation, by a fuzzy separation between labour and capital and by labour relations based on kinship or social relationship rather than formal contracts. In order to reveal the informal economy determinants in Romania, the author used the data provided by the Integrated Household Survey from September 1996 and, also, the Survey of Households Informal Economy Activity attached to it, for a sample of 2577 households. The statistic tests showed that the ratio of formal to informal activity was in favour of the first one (59% of the answers as compared to 30% in favour of informal). Also, a large part of the households work for their own needs using their own labour force, no matter of age and education level. They work especially in agriculture, various services and in house mending and improving activities. * (This is the version of the paper presented at the Conference on "Household informal economy activities in candidate countries: size, determinants and implications for the enlargement - Empirical evidence from Romania and Bulgaria", 25-28 March 2002, Bucharest. The authors gratefully acknowledge the financial support of PHARE ACE Programme 1998. They bear sole responsibility for the views expressed herein. The author thanks to the assistant Nona Chilian for the useful help in this stage).