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Are Marginalised Populations More Likely To Engage In Undeclared Work In The Nordic Countries?

Colin C. Williams, Ioana Horodnic

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The aim of this paper is to evaluate the validity of the ‘marginalisation thesis’, which holds that marginalised populations are more likely to participate in the undeclared economy, in relation to Nordic societies. To do this, a 2013 special Eurobarometer survey is reported on who engages in undeclared work conducted in three Nordic nations, namely Denmark, Finland and Sweden involving 3,013 face-to-face interviews. Using multilevel mixed-effects logistic regression analysis, the finding is that the marginalisation thesis is valid in relation to some marginalised populations, namely those having difficulties paying their household bills, younger age groups, those defining themselves as working class and those who hold non-conformist norms, values and beliefs on tax compliance. Other marginalised populations however, including the unemployed, those living in rural areas and with less formal education, are revealed to be no more likely to engage in undeclared work than the employed, those in urban areas and with more years in education. Yet others marginalised populations, including women and people living in less affluent Nordic nations, are significantly less likely to participate in the undeclared economy than men and those living in more affluent Nordic countries, thus supporting the reinforcement thesis that undeclared work reinforces, rather than reduces, the disparities produced by the declared economy. The outcome is a call for a more nuanced understanding of the marginalisation thesis as valid for some marginalised populations but not others. The paper concludes by discussing the implications for theory and policy of this more variegated assessment of the marginalisation thesis.