According to forecasts, an increase in illegal jobs in Germany is expected this year. The expected value of the services provided through undeclared work: 481 billion euros.
According to a forecast by undeclared employment experts, the size of the shadow economy in Germany will continue to increase this year.
Overall, the value of services provided illegally through undeclared work will increase by 38 billion to 481 billion euros, according to a forecast published jointly by Linz Professor Friedrich Schneider and Tübingen Professor Bernhard Boockmann from the Institute for Applied Economic Research (IAW, Tübingen). became.
This means an increase of 8.4 percent. The share of the forecast shadow economy in gross domestic product will therefore increase to 11.3 percent. After a phase of decline, this has been rising again since 2021 and, according to economists, is likely to reach the 2014 level in 2024.
The forecast assumes that gross domestic product shrank by 0.6 percent last year and that the number of unemployed averaged 2.6 million. Furthermore, an expected inflation rate of 2.7 percent was included in the scientists’ calculations.
According to preliminary data from the Federal Statistical Office, the German economy fell by 0.3 percent last year compared to the previous year, adjusted for prices. And according to previous data, inflation averaged 5.9 percent in 2023.
Increased standard rate of citizen’s benefit reduces undeclared work
The experts expect that the introduction of citizens’ money with an increased standard rate will reduce undeclared work overall. The improved salaries will also mean that some of those receiving citizen’s benefit will have less desire to take up a legal job.
However, the effect is that the increased citizen’s allowance payments mean that fewer recipients feel the need to earn money illegally on the side. This means that undeclared work will decrease by 2.4 billion euros as a result of the introduction of citizens’ money.
By returning to the full VAT rate in the catering industry, however, the opposite effect will be achieved. The scientists assume an increase in undeclared work to the tune of 1.9 billion euros.
Schneider and Boockmann have been calculating the extent of undeclared work since the late 1990s. The forecasts use a complex procedure that combines several variables that are indirect indicators of the shadow economy. These include tax morale, the unemployment rate, the inflation rate and the demand for cash.
Source: Stern
