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COVID-19 pandemic will reduce employment in grey economy: think tank

The COVID-19 pandemic will decrease the rate of employment in the shadow economy and reduce the scale of partial remuneration based on informal contracts, Jakub Rybacki from the Polish Economic Institute (PIE) said.

Mr Rybacki added that one of the consequences of the pandemic may be more frequent switching to business-to-business (B2B) contracts in service industries than the development of the grey area. As he added, work without a contract may be more common in the tourism industry and among leisure services.

“This is the effect of low employee protection. At the time of problems with the operativity of the company, employers first dismiss such employees or reduce their salaries,” he said.

Mr Rybacki added that although in previous crises, concerns about the informal economy mainly pertained to the construction sector and industry, this situation is unlikely to repeat itself after the pandemic. As he explained, these industries were relatively mildly affected by the crisis, while entrepreneurs often report the problem of difficulties in finding employees.

The Polish Economic Institute is a public economic think tank dating back to 1928. The Institute provides analyses and expert opinions for the implementation of the Strategy for Responsible Development, as well as the popularisation of Polish scientific research in the field of economic and social sciences both at home and abroad.

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