Evaluating the Relationship Between Migration and Participation in Undeclared Work: Lessons from Bosnia and Herzegovina

Abstract

Until now, studies of the relationship between migration and participation in undeclared work have adopted as their unit of analysis the activity of specific migrant groups in their host country. In this paper, a novel approach is pursued by adopting a different unit of analysis. To examine the relationship between migration and participation in undeclared work, the activity of the domestic population in their home country is analysed according to their previous migration activity. To do so, data is reported from a 2015 survey of 6,021 randomly selected respondents aged between 16 and 65 years old in Bosnia and Herzegovina. The finding is that undeclared work is the sole source of earnings for 21% of the total labour force, but for 26% of those who have spent more than three months abroad, 18% of internal migrants and 22% of those who have not migrated either internally or abroad. After controlling for other determinants of undeclared work, a Probit regression analysis finds a significant 8% higher probability of participation in undeclared work for those who have spent time out of the country compared with the non-migrant population. The theoretical and policy implications are then discussed.