Examining a multi-dimensional undeclared work via the REBUS-PLS

Abstract

PurposeThis article intends to investigate on the undeclared work (UW) by involving several features, which can be evaluated throughout a set of appropriate variables. The REBUS-PLS (Response Based procedure for detecting Unit Segments–Partial Least Squares) has been proposed in order to support policy decisions targeted to this heterogeneous scenario. The authors refer to Italy, due to the disparity of its territorial districts, but the conclusions can be extended to different European countries.Design/methodology/approachA total of 2,877,000 firms has been involved for empirical analysis. The manifest variables have been obtained by fixing both NACE codes and the NUTS2 level.FindingsThe analysis confirms that the model is suitable to evaluate the effects of the indicators connected to ‘Labour force’, ‘Tax system’, ‘Non-Profit Organizations’, and ‘Migrants’. Special prominence has been dedicated to the labour inspections' features.Research limitations/implicationsIf the management designs the policy actions by using the model proposed, a critical evaluation of the implications is needed, by focusing different perspectives and several weaknesses.Practical implicationsAssuming that the Italian regions are relatively homogeneous, results reveal no significant correlations to the UW, except for the taxes. In contrast, the involvement of the heterogeneity shows that the UW significantly depends on the changes of Labour force, Tax system and NPOs dimensions, in 11 out of 18 Italian regions. No clear evidence emerges from Migrants feature, which seems to have a negatively impact on the UW.Originality/valueTo the authors' knowledge, compared to the previous research papers, the analysis of the UW via REBUS-PLS and the mentioned manifest variables, has never been undertaken so far.