Working: According to the study, undeclared work is increasing – often young men

According to a study, more and more people in Germany are working illegally and bypassing the tax office. The employer-related Institute of the German Economy (IW) estimates that the number is between 8 and 10 million. This is based on a representative survey of more than 2,600 people aged 18 and over in April and May 2024.

Around 29 percent know one or more people who work or have people work illegally. This is significantly more than in an earlier survey in 2022/2023, when it was a good 22 percent. Because double counting cannot be ruled out using the question method, only a range can be given for the estimate, says study author and IW economist Dominik Enste.

Expert: Fraud is particularly worthwhile for high earners

The proportion of those who say they work past the tax office themselves is significantly lower (5 percent). From Enste’s point of view, this number is less meaningful, and not just because of the small sample size. “People just don’t like to talk openly about the fact that they’re working illegally,” he says.

According to the survey, men and younger people between the ages of 18 and 34 are more likely to work illegally. This is also above average among higher earners who have an income of more than 4,000 euros, such as architects and craft entrepreneurs. “Because fraud is particularly worthwhile for them and the opportunity to do so arises more often,” says the study. The “Spiegel” first reported about it.

According to researchers, there is a high number of unreported cases of undeclared work. Other areas are also severely affected. According to an IW study published in December, 90 percent of the more than four million household helpers in Germany clean black.

Politicians want to better combat undeclared work

This costs the German state a lot of money. According to calculations by the IW, undeclared work accounts for around two thirds of the entire shadow economy. Their share of gross domestic product is estimated at around ten percent. In an international comparison, Germany is in the middle field, it is said.

The federal government wants to better combat undeclared work. The customs financial control of undeclared work should be strengthened. In November, the Federal Cabinet passed a draft law to modernize and digitize the fight against undeclared work.

Politicians must take more effective action against the causes and reduce the tax burden, says expert Enste. “Clandestine work is so attractive because the employees have too little net of their gross.” New laws, regulations and controls would not solve the problem.