The study uses an indirect “labor force method” to gauge the scale of informal work in Romania from 2000 through 2024. It anchors on the assumption that, absent hidden employment, the labour‐force participation rate would remain at its historical peak of 65.20 percent—achieved in 2000 Q3. For each quarter thereafter, this benchmark is applied to the total adult population to derive a hypothetical fully captured workforce. Subtracting the officially surveyed active population (employed plus unemployed) reveals the “missing” workers operating informally.

Analysis of Eurostat’s quarterly data shows two notable surges. Between 2002 and 2005, the informal share climbed sharply—regularly exceeding 20 percent and topping 23 percent in early 2003—driven largely by pre‐accession industrial restructuring and the formal sector’s limited capacity to absorb displaced labour. A second, even steeper rise followed the COVID-19 shock: by 2021 Q1, nearly one in three active individuals were estimated to be in informal roles. Although the economy recovered, informal employment remained entrenched at roughly 25–27 percent through 2024.

These patterns carry significant policy implications. Persistent informality erodes tax bases, weakens social‐insurance systems, and complicates labour‐market regulation. In an era marked by digital disruption and evolving work arrangements, Romania faces a clear imperative: to design stronger incentives, bolster enforcement, and develop innovative frameworks that encourage formalization and safeguard both workers and public finances.