Undeclared work has deep roots in Macedonia as 1 in 16 adults and 1 in 8 of the employed population engage in undeclared work. Unemployment remains unusually high compared with the EU average. The continuing state and political crisis in the country from 2005 further sets the stage for non-compliant practices, including undeclared work. The policy brief notes that an effective long-term policy towards undeclared work and envelope wages should be designed aimed at changes in the institutional framework, as well as a reversal of the positive attitudes towards noncompliant activities. One way forward would be to supplement the traditional repressive view based on the rational actor with the social actor perspective. More support should be provided for people who would like to exit the undeclared economy and (re)enter the formal one. Citizens that are more likely to engage in undeclared work should be targeted with educational campaigns.
