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Estimation of the size of informal employment based on administrative records with non-ignorable selection mechanism

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  • Maciej Berk{e}sewicz
  • Dagmara Nikulin

Abstract

In this study we used company level administrative data from the National Labour Inspectorate and The Polish Social Insurance Institution in order to estimate the prevalence of informal employment in Poland. Since the selection mechanism is non-ignorable we employed a generalization of Heckman's sample selection model assuming non-Gaussian correlation of errors and clustering by incorporation of random effects. We found that 5.7% (4.6%, 7.1%; 95% CI) of registered enterprises in Poland, to some extent, take advantage of the informal labour force. Our study exemplifies a new approach to measuring informal employment, which can be implemented in other countries. It also contributes to the existing literature by providing, to the best of our knowledge, the first estimates of informal employment at the level of companies based solely on administrative data.

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  • Maciej Berk{e}sewicz & Dagmara Nikulin, 2019. "Estimation of the size of informal employment based on administrative records with non-ignorable selection mechanism," Papers 1906.10957, arXiv.org.
    • Handle: RePEc:arx:papers:1906.10957
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    Cited by:

    1. Dagmara Nikulin & Ewa Lechman, 2021. "Shadow Economy in Poland: Results of the Survey," SpringerBriefs in Economics, in: Shadow Economy in Poland, chapter 0, pages 49-65, Springer.

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