Regularisation initiative to tackle the informal economy, Kosovo

Regional Cooperation Council, Sarajevo, 2021

On 13th May 2020, as part of the “Relaunch” decree in Italy, it was agreed that from 1 June to 15 July 2020, requests for regularisation may be submitted for undocumented migrant agricultural workers, and domestic workers and carers. The aim was to regularize undocumented migrant workers enabling them to move into the declared economy As of April 15 2021, of the 220,000 people nationwide who had applied to the interior ministry for a permit, just 11,000, or 5%, had received one.

2009

Regularization of the status of irregular migrants poses a dilemma for host countries. On the one hand, regularization sends a signal that clandestine entry with a view to finding irregular employment, or overstaying, can be rewarded, and may thus serve to encourage further irregular migration. In fact, this outcome is frequently assumed, although there is not much evidence to support it. On the other hand, particularly when irregular migrants cannot be removed from the territory for regular, humanitarian or practical reasons (e.g., migrants who have established economic and social ties with the host society), regularization is a viable policy option and should be seriously considered, as it serves to prevent their further marginalization and exploitation. There are clear economic benefits for the host country in regularizing its irregular migrant labour force, in terms of increased taxes and social security contributions. Moreover, regularization can serve to combat the informal labour market by affording regular status to irregular migrant workers gainfully employed in the shadow economy (OSCE-IOM-ILO Handbook, 2006) 1. Regularization can also lead to an increase in employment of national workers, given that low wages and informal employment of migrant workers undermines the competitiveness of national workers. The Russian Federation (RF) is a significant destination country for migrants. Labour migration to Russia, mainly from CIS countries and East Asia, is by far the most substantial migration inflow into the region. According to data from the Russian Federal Migration Service, employment of regular foreign workers in the national economy has greatly increased over the last 15 years. The number of work permits issued to foreign citizens rose from 129,000 in 1994 to 460,000 in 2004, and to 670,000 in 2005. Since the new immigration legislation was implemented in 2007, 1.1 million migrant workers have been registered. In spite of this growth, however, regular labour migration constitutes only a small proportion of the country's economically active population. The majority of migrant workers in the country are in an irregular position. The presence of large populations of irregular workers is symptomatic of the need for better policies, not least because there are pressing concerns about the human and labour rights of the workers themselves. The migration authorities of the Russian Federation have made efforts to regulate the situation of irregular workers. In March 2005, ILO organised a round table discussion on policy options for dealing with irregular migration in the Russian Federation. The meeting introduced a draft concept of migrant regularization in the Russian Federation and acquainted Russian participants with international experience. This was followed by a pilot regularization of irregularly employed migrant workers who had entered Russian Federation on a visa-free basis (September-December 2005). Finally, new laws aimed at facilitating registration and regular employment of foreigners and reducing the number of irregular immigrants on Russian territory entered into force in January 2007. The effectiveness of the drafting and implementation of the new laws is vital for regularizing the pool of irregular workers making a major contribution to the Russian economy as well as reducing future irregular migration. In this connection, steps to discourage the employment of irregular workers are equally important. The study will, therefore, look at regularization measures in the context of the new immigration legislation in the Russian Federation and measures planned to discourage employment of irregular workers.

THE EFFECT OF REGULARIZATION POLICIES FOR MIGRANTS ON THE LABOR MARKET, 2022

Policies aimed at reducing the irregular migrant population have various effects depending on the country concerned, the migrant population in the country, the socioeconomic structure of the countries, and their economic conjuncture. Although these policies affect numerous dynamics in the relevant country, they directly affect the labor market in the short term. This study aims to provide information about the literature on the effects of policies aimed at reducing the irregular migrant population on the labor market.

2020

2012

The informal economy is present in all countries, but its consequences reflect in different countries with different intensity. Types and scale of informal economic activities reflect the specificities of socio-economic context and the integration of the countries into the wider local-regional economy.

Dialogue, 2005

In line with the ILO resolution concerning decent work and the informal economy, adopted at the International Labour Conference in 2002, governments have a key role to play, in consultation with workers and employers, in promoting decent work through the extension of their services to the informal economy. This requires the development of innovative approaches and new tools which can be used by ministries of labour to promote decent work through technical assistance to small and micro-enterprises and independent or self-employed workers. During the current biennium, José Luis Daza, Senior Labour Administration Specialist of the Dialogue Department, worked on this research paper for ministries of labour on the theme "informal economy, undeclared work and labour administration". He was supported by other colleagues: Giuseppe Casale, Normand Lecuyer, Rainer Pritzer and Alagandram Sivananthiram. This research document was validated at an Experts' meeting on "Undeclared work, informal economy and labour administration" which was held in Turin on 4-6 May 2005. The workshop key objective was to show how labour administration can contribute to extending decent work to those categories of workers deprived of rights, either because they are undeclared by their employers, or are considered excluded from the application of labour and social security laws. The Experts' meeting saw the

Employment Policies in South-East Europe , 2012

"Unemployment is one of the major challenges that every Kosovo government has faced. Today the unemployment level has reached staggering figures of between 39% and 48%, depending on the source. With only 25% of the working age group employed, Kosovo has the lowest employment in Europe. The public sector remains the highest employment agency with more than 70,000 people. Although the number of registered private firms has constantly increased, the informal sector remains very strong. Around 30% of overall businesses operate in the informal economy. Even though a social assistance programme exists, due to the tight fiscal space it has low coverage, leaving over 60% of the poor out of reach. Around 30,000 people join the labour market every year and the number of those who reach retirement age is much lower. With such an increasing number of job seekers and with little work opportunities, the government should seriously think about a more efficient active and passive employment policy. Reviewing Employment Strategy 2010-2012 should be the starting point. "

The informal sector after COVID-19, 2022

A new respiratory virus (COVID-19) become a worldwide concern in the early months of 2020. The World Health Organization declared a worldwide health emergency on January 30th, then a pandemic on March 11th. Since 2020, a rapidly expanding portion of the world's population has been subjected to greater restrictions on travel and the shutdown of non-essential companies. This has had a significant effect on various service businesses, ranging from tourism and hospitality to retail and leisure, many of which have temporarily closed as a result. Many governments have responded by providing temporary financial assistance to the impacted firms and employees. Employees can be

This report examines the drivers of the undeclared economy in Croatia, the current organisation of the fight against undeclared work, and reviews the current and potential policy approaches and measures for tackling undeclared work in Croatia. Drivers of the undeclared economy in Croatia Recently, significant advances have been made in explaining the determinants of undeclared work. To explain undeclared work, it has been understood that every society has institutions which prescribe, monitor and enforce the ‘rules of the game’ regarding what is socially acceptable. In all societies, these institutions are of two types: formal institutions that prescribe ‘state morality’ about what is socially acceptable (i.e., laws and regulations), and informal institutions which prescribe ‘citizen morality’ (i.e., socially shared rules, usually unwritten). Viewed from this institutional perspective, undeclared work is explained as arising when the failings of formal institutions lead to state morality being different to citizen morality. In the last few years, multiple studies have identified these formal institutional failings. Undeclared work is more prevalent when there is: lower GDP per capita; higher public sector corruption and lower quality governance; lower expenditure on labour market interventions to help the most vulnerable groups; lower social expenditure, and social transfer systems that are ineffective in reducing the level of inequality and severe material deprivation. To tackle the undeclared economy in Croatia, therefore, there will be a need to continue to: • improve the level of GDP per capita; • improve governance and reducing public sector corruption; • maintain and improve the levels of expenditure on labour market interventions to help the most vulnerable groups from its current low relatively base level; • persist with increasing social expenditure; and couple this with • developing more effective social transfer systems that reduce the levels of income inequality and levels of severe material deprivation in Croatian society. Besides addressing these structural determinants, there are many additional organisational and policy initiatives that can be also pursued to tackle the undeclared economy. Organisation of the fight against undeclared work: institutional framework Croatia has neither a single agency responsible for the fight against undeclared work, nor a central body responsible for ensuring coordinated action by the multifarious departments involved in tackling undeclared work. Instead, there is a more fragmented approach. Responsibility for tackling undeclared work is distributed across a range of institutions, with each taking responsibility for different segments of the undeclared economy. Whilst labour law violations are the responsibility of the Labour Inspectorate, tax non-compliance responsibility lies with the Ministry of Finance and social security and insurance fraud violations with the social insurance bodies. There is currently little coordination in the fight against undeclared work across the multifarious institutions in strategic, operational or data-sharing terms, and no common cross-cutting targets. The quality of governance, therefore, needs to be improved. A more coordinated response is required, which in part will be dealt with by the decision to establish a State Inspectorate in late 2017. The involvement of social partners in relation to tackling undeclared work remains relatively weak, with little involvement in decision making. Given that tackling undeclared work requires their participation, greater involvement of the social partners is recommended. Current policy approach and measures: an evaluation Croatia currently employs a relatively narrow deterrence approach and the policy measures heavily focus upon deterring participation in undeclared work by increasing the penalties and risks of detection. Little emphasis is put on improving the benefits of and incentives for declared work, or more indirect preventative tools, such as awareness raising campaigns and dealing with the imperfections and failings of formal institutions (e.g., by facilitating procedural and redistributive justice and fairness, and pursuing wider economic and social policies). There is therefore a need to shift away from such a heavy reliance on deterrence measures to the broader use of preventative incentives, as well as awareness raising and a focus upon targeting and tackling the major drivers of the undeclared economy.