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The 'Underground Economy', Immigration, and Economic Development in the European Union: An Agnostic-Skeptic Perspective

IJED, Vol. 6 No. 3, (2004)

Is the underground (or informal) economy growing in European countries and to what extent is it related to (illegal) immigration? This paper draws on research primarily from the experiences of European Union countries since the early 1990s, and critically analyses the relationship between the apparent growth of (illegal) immigration, new forms of political economy, and what shall be referred to in this paper as ‘underground employment’. By disentangling these complex processes, I provide a fine-grained critical assessment of some of the more hyperbolic statements about the growth of underground employment, especially with respect to (illegal) immigration. That is, without denying the presence of underground employment, or the role of immigration within it, my discussion ranges from the agnostic to the skeptical. I conclude by suggesting what implications my analysis has for economic development policies with respect to underground employment in European countries.

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