As part of an international research mobility supported through a Horizon Europe framework, part of the members of the IDRL research team delivered the lecture “Shadow economy and informality: approaches, measurements and public policies”

The lecture took place on July 30th, 2025, in a hybrid format, with on-site participation at the Pontificia Universidad Javeriana (Bogota, Clolmbia) and online attendance for partner network members.

The session was delivered by Prof. Adriana AnaMaria Davidescu and PhD Student Marina Diana Agafiței from the Bucharest University of Economic Studies (BUES)/National Scientific Research Institute for Labour and Social Protection, as well as Eduard Manta  from the Bucharest University of Economic Studies (BUES) with the support of Maria-Bianca Bolboașă in the preparation of the presentation, all of whom are members of the IDRL alumni.

The lecture explored the complexity of the shadow economy and informality in Romania, Central and Eastern Europe, and at the global level, combining conceptual frameworks with empirical evidence. It presented 5 research studies highlighting how institutional quality, taxation, labour-market structures, and digitalisation shape informal economic activity and why multidimensional measurement approaches are essential for effective public policy design.

The first study examined regional variations in the shadow economy across Central and Eastern Europe (2001–2021) using an enhanced Currency Demand Approach combined with PMG–ARDL modelling. The findings revealed strong territorial disparities, with capital regions showing consistently lower informality, underlining the need for place-based fiscal and governance interventions.

The second study focused on Romania, comparing two major estimation techniques (MIMIC models and the Currency Demand Approach) to distinguish between shadow production and tax evasion over 1999–2017. The results emphasized that these phenomena follow different cyclical dynamics and require differentiated policy tools.

The third study estimated informal employment in Romania during 2000–2024 using the Labour Force Method, identifying persistent hidden labour activity, particularly after major economic transitions and the post-pandemic period. The conclusions highlighted structural vulnerabilities in labour-market participation and the long-term challenges of formalisation.

The fourth study extended the analysis to a global scale, developing a Cash-Demand Atlas of the informal economy across 98 countries (1995–2022). Using panel ARDL modelling, the research provides a transparent framework for understanding how governance, tax systems, and digital-payment infrastructure influence informality worldwide.

The fifth study embedded informality into sustainable development measurement by constructing a Sustainable Development Index for Europe (2010–2022). By integrating shadow economy and undeclared work indicators, the research demonstrated that informality significantly affects sustainability performance and should be incorporated into SDG monitoring and development policy design.