Unregistered Work: Causes and Consequences.

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2 Mar 2021

Labour, Migration and Social Policies

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Stanislawa Golinowska

Agnieszka Kulesa

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Stanislawa Golinowska
Professor of Economics, specialist in social policy, labour market, health economics and public health.

Articles from this author:
- 169th mBank-CASE Seminar Proceedings: An outline of needed reforms for the healthcare system: What has the COVID-19 crisis changed?
  Limitations on the efficient management of healthcare and on effective management in health facilities have been a constant problem in Poland for about 20 years. The Covid-19 pandemic has uncovered all of the shortcomings of healthcare in Poland, which had consistently been being brought up in expert works and the public debate. Our report on the healthcare interventions that are essential today – at the peak of the Covid-19 epidemic in Poland – is the fruit of presentations and discussions at the mBank-CASE Seminar held on April 15, 2021. Thus far, reform programs haven’t been comprehensive, and even those based on accurate and comprehensive diagnoses of the situation haven’t had a lot of power to enact change. The CASE Foundation has also undertaken work indicating the main causes of healthcare’s ailments and outlining the threats to Poles’ health. Previously, it had analyzed the ineffectiveness of the system after the 1999 reform. Much attention was paid to the dangerous lack of medical and care staff, factoring in the aging population with growing medical and care needs in developing forecasts. Alongside the currently constant theme of underfinancing the healthcare system, much attention has been paid in recent years to the subjects of weak governance; the lack of the necessary information to diagnose problems; the lack of planning, reporting and evaluation procedures; and insufficient dialog with both the public and healthcare workers, resulting in burdensome strikes by nurses, residents, anesthesiologists, and physical therapists. Attention has been drawn to the managerial incompetence of political leaders in the healthcare system, regardless of their occasionally very high medical qualifications. The Covid-19 pandemic has uncovered all of the shortcomings of healthcare in Poland, which had consistently been being brought up in expert works and the public debate. Our report on the healthcare interventions that are essential today – at the peak of the Covid-19 epidemic in Poland – is the fruit of presentations and discussions at the mBank-CASE Seminar held on April 15, 2021 (video: Kierunki niezbędnych reform w ochronie zdrowia - Bankier.pl) They address all the subjects raised at the mBank-CASE seminar in 2018: 1) the need for increased outlays on healthcare, along with more effective allocation; 2) the need for urgent investment in developing medical staff resources; 3) introducing transparent and socially acceptable rules for individual co-payments and 4) efficient public management (governance) of the healthcare system (see Golinowska et al, 2018). Additionally, it introduces the theme of organizing healthcare in relation to the dilemmas of the decentralization and autonomy of the main management entities and facilities that provide healthcare. It also raises the problem of public health and the consequences of neglecting this constantly underappreciated area of healthcare. Each of these subjects requires an explanatory introduction of the categories applied and of more general relevant principles (and theories) which will make it easier to understand our recommendations.
- Main conclusions and supplementation to the CASE Report: “Our Europe: 15 years of Poland in the European Union”
  The presented text, designed as an Executive Summary of the “Our Europe. 15 years of Poland in the European Union” report, differs from the classic form of a summary. On one hand, it adds a lot of contextual historical and institutional information which functions as an introduction to the solutions presented in the following chapters. … Continued
- 156th mBank-CASE Seminar Proceedings:
  What’s nextfor healthcare in Poland:diagnosis and prognosis The health protection system is the object of constant pressures and difficulties in mitigating them, and even more so eliminating or at least reducing them. Changes are undertaken under the influence of a one-sided political assessment, the interests of various groups of participants or the protests of successive … Continued
Author’s articles
Agnieszka Kulesa

Specialist in Social Sciences
Agnieszka Kulesa has been working at CASE since 2018. She specialises in the labour market, international labour migration, and migration policies within and outside the European Union.

Articles from this author:
- Exploring the Entrepreneurial Potential of Belarusian Migrants in the EU
  This Working Paper aims to deepen the understanding of Belarusian migration to the EU, with a particular focus on entrepreneurship among Belarusian migrants.
- Intergenerational Dialogue for the Future of My City
  The publication is an educator's guidebook designed to inspire and support discussions between youth and elderly participants about shaping the future of urban environments. Created as part of the "Future for All" project by CASE (Center for Social and Economic Research), this guidebook uses Warsaw as a case study but provides adaptable insights for cities globally. It is funded by the European Economic Area and Norwegian Financial Mechanism (2014–2021). The guidebook delves into critical themes, including: Demography: Addressing the implications of an ageing population, declining birth rates, and migration patterns for urban planning and social cohesion. Migration: Exploring the integration of diverse populations and fostering intercultural and intergenerational understanding. Climate Change: Highlighting urban sustainability through public initiatives like green spaces and waste reduction. Digitalisation: Emphasizing smart city development while bridging the generational digital divide. Central to its approach are intergenerational activities that foster collaboration and mutual understanding, with a focus on scenario planning, problem-solving, and community engagement. This resource equips educators with tools to promote critical thinking and inclusivity, encouraging young and older citizens alike to actively shape resilient and sustainable urban communities.
- Poland’s Migration Strategy for 2025-2030 – Expert Commentary
Author’s articles

People working without a contract earn “net” the same amount as those working legally. However, without a contract, they lose many benefits associated with registered employment.

A significant motivation for taking unregistered work is the desire to increase earnings by avoiding paying social insurance contributions and taxes. However, an analysis by CASE based on data from BAEL (Labour Force Survey conducted by the Central Statistical Office) from 2017 shows that the belief in higher earnings when working without a contract is incorrect.

“If we apply the so-called propensity score matching (PSM) method, which in this case involves comparing the earnings of people with the same education, age, and gender, it turns out that people working without a contract receive the same hourly rate as those formally employed. The vast majority of people not only do not gain any wage benefits from working off the books but also lose out because health and pension contributions are not paid for them,” says Dr. Jacek Liwiński, a CASE expert who conducts research on the labor market in Poland.

Scientific research also confirms that working in the informal sector not only does not increase our income but also negatively impacts our career. This phenomenon is called the scarring effect. The lack of documented work experience makes it difficult to find legal employment and achieve promotion in the future. Employers may also mistreat unregistered workers, which can result in reduced self-esteem and negatively impact the motivation to develop and seek legal employment.

More information on the risks associated with performing or assigning unregistered work can be found in our handbook “Unregistered Work: Causes and Consequences.”

The handbook has been developed to provide trainers and teachers with basic knowledge that can be useful in conducting training promoting registered work. On one hand, it presents the benefits of registered work, and on the other, the potential costs associated with unregistered work. First, this information is presented concerning employees (chapter 2), particularly emphasizing that the negative consequences of unregistered work are borne throughout life. Due to the specific situation of foreigners working in Poland, the consequences borne by this group are described separately (chapter 3). Furthermore, the effects concerning employers in the gray market, with a distinction for those employing foreigners, are presented (chapter 4). An addition to the presented information is a description of actions taken by the state to limit the phenomenon of unregistered work in Poland (chapter 5) and in the UK, which is a leader in the fight against the gray market (chapter 6).

We have also launched the website www.naumowe.pl, which features courses on the benefits of legal employment, aimed primarily at young people, the unemployed, foreigners, and employers.

The research, handbook, and website were created as part of the project “Building and implementing innovative tools to reduce the phenomenon of unregistered work in institutions co-responsible for minimizing the gray market on the labor market,” co-financed by the European Social Fund under the Knowledge Education Development Operational Program 2014-2020. The project was implemented by CASE – Center for Social and Economic Analysis in cooperation with the National Revenue Administration, the Voluntary Labour Corps – Headquarters, the Provincial Labour Office in Olsztyn, the Provincial Labour Office in Katowice, the Association for Legal Intervention, the Institute of Labour and Social Studies, Maguire Policy Research Ltd, and the Institute of Public Finance.

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Unregistered Work: Causes and Consequences.

Stanislawa Golinowska

Articles from this author:

Agnieszka Kulesa

Articles from this author:

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