Study links economic growth in Germany to drop in cash-in-hand work

Black market employers have taken a hit from Germany's booming job market, with more legal work available to those previously in untaxed, cash-in-hand jobs, according to a study released on Tuesday.

The amount of people working illicitly is expected to decrease in 2016 slightly by 0.4 percentage points to 10.8 per cent, the Institute for Applied Economic Research at the University of Tuebingen said in its report.

"In good economic times, employees earn more, their hourly rate increases and they can receive paid overtime," co-author Professor Friedrich Schneider said.

"For that reason, less people want to work illegal jobs in their spare time," he said.

Germany's black labour market, however, remains big business, and is expected to generate illegal revenues of 336 billion euros (366.5 billion dollars) this year, marking a drop of 3.35 billion euros on 2015.

The report's authors warned that the swell in migration to Germany, where 1.1 million people sought asylum last year, could slow the progress. They estimate that 100,000-300,000 migrants and refugees are employed illegally in low-paid jobs, for example as cleaners or on building sites.

"The refugees are damned to do nothing in their shelters for months, so it stands to reason that they want to get out at some point and go into the illegal job market," Schneider said.

People applying for asylum in Germany often wait months until a decision is made on their case, during which time they can not seek work.

Last update: Tue, 02/02/2016 - 12:43
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