On the Reasons for an Informal Economy in Italy: The Motivations of Entrepreneurs and Workers

The chapter will move along the following research path: a) First of all, our intention is to help the contribute understanding the social and quantitative relevance of informal employment per geographic areas and per regions; b) We will then focus on the reasons that push workers to accept or even seek forms of employment that from the outside seem to return to the past in terms of labour exploitation and disrespect for employees’ rights and personal dignity. One of the most important Italian research institutes, the Eurispes, focused on the shadow economy in its 31st Report on Italy. The middle class has paid the highest price for the policies pursued so far. However, it may be considered that the use of undeclared labour has been a way out, “acting as a real social safety net in the hardest years of the crisis”. The dynamics of the labour market are regulated less and less by an adequate and effective normative system. Informal employment is inserted and spread within this space. It is about an expedient for many small entrepreneurs, a runaway for many breadwinners (male or female does not matter), a ploy for many young people in search of employment, not solely a way to get rich at the expense of the poor people. Our analysis of the Informal Economy Model (IEM) and the system of convenience for workers and employers confirms that the IEM is based on the following four factors. · Globalization: The informal economy is a global phenomenon which affects all countries in the world, but not all in the same way; · Spread: In Italy the phenomenon is widespread both for structural and cultural reasons; · Segmentation: The differences between the Italian regions (centre-north and south) are enormous, in the same way as they are considerable according to the examined sectors; · Digitization: The new occupations, more or less recent, that proliferate in the network economy do not shift the system of convenience, as they are also misusing informal employment models.