Shadow economy in construction sector declines somewhat

The share of shadow economy in construction continued to drop last year, sliding to 34.1%, according to the annual study by Arnis Sauka, professor at the Stockholm School of Economics in Riga (SSE Riga) and a board member of Business Against the Shadow Economy association.

The share of shadow economy in construction has declined by 1.1% from 35.2% in 2017.

The first study on shadow economy in the construction sector was conducted in 2016 when this share reached 40 percent.

According to the latest data, last year the share of unreported wages in construction declined by 3.9% points - from 32.1% in 2017 to 28.2% last year.

The share of unreported revenue in the sector last year accounted for 27.1% compared to 26.7% in 2017.

Also, the number of unregistered workers in the construction sector increased to 18.8% from 17.6% a year ago.

The level of unofficial payments or corruption in order to "get things going" last year accounted to 16.4% compared to 15.5% in 2017.

The study was conducted in cooperation with Latvijas Fakti pollster, surveying 250 managers and specialists of Latvia's leading construction companies. Also, express interviews of heads of the largest construction companies were carried out.

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