The Hidden Crisis: Vulnerabilities of Casual Workers in Europe’s Informal Employment Sector

Despite Lower Informal Employment Rates Compared to the Global Average, Europe’s Casual Workforce Faces Severe Risks Due to Lack of Legal and Social Protections

In Europe, the plight of casual workers operating within the informal employment sector remains a pressing concern, even as the region reports lower informal employment rates compared to the global average. Informal employment—defined as work without legal contracts or social security—persists as a significant issue across Europe, with many workers exposed to precarious conditions and minimal protections.

Globally, informal employment affects 58% of the workforce, with the figure decreasing to 50% when agricultural workers are excluded, according to the International Labour Organisation (ILO) 2023 estimates. In Europe and Central Asia, while the informal employment rate has traditionally accounted for one in five workers, recent trends show a more nuanced landscape.

Countries such as Hungary and Poland have notable informal employment rates, standing at 17.8% and 9.8%, respectively. Meanwhile, several EU member states report much lower rates, with Malta at 0.7%, Slovenia at 1%, and both Belgium and Bulgaria at 1.3%. The scenario shifts significantly when considering EU candidate and potential candidate countries, with Georgia and Moldova experiencing alarmingly high rates of informal employment at 56% and 52%, respectively.

Turkey presents another stark example, with an informal employment rate of 27.3%. This high rate is largely attributed to its substantial agricultural sector, which constitutes 15% of the workforce—much higher than the European average of around 4%. Professor Aziz Çelik from Kocaeli University notes that informal work is rampant in Turkey’s agricultural sector, where 81% of jobs are informal. The prevalence of informal employment is particularly pronounced among women, with rates of 32% compared to 23% for men. Despite a reduction in informal employment from over 50% in 2004, ongoing issues such as frequent tax and insurance amnesties and inadequate inspections continue to undermine progress.

In addition to these concerns, informal employment rates are notably high in several EU candidate and potential candidate countries, and surprisingly, the UK exhibits higher rates than many of its European counterparts. Among the top five European economies, the UK leads with a 6.5% informal employment rate, followed by Italy at 3.8%, and France at 3.6%. Spain and Germany report lower rates at 2.6% and 2.5%, respectively.

Professor Mihails Hazans from the University of Latvia explains that variations in informal employment rates across Europe are influenced by social norms, legislation, and sectoral composition. For instance, Poland’s high prevalence of small enterprises that rely on informal labor contributes to its elevated rates. Sectors like hospitality and construction, where informal labor is more easily integrated, also experience higher levels of informal employment.

In the UK, the lack of a legal requirement for written contracts and the rise of the gig economy—often characterized by informal agreements—contributes to higher informal employment rates. Hazans’ research highlights that the UK’s informal employment rate, which stood at 8.5% in 2018, rose to 13.3% between mid-2021 and 2022 before decreasing to 8.9% in 2023. Similar trends are observed in Ireland and Portugal, with informal employment rates significantly higher than ILO estimates.

The lack of social and legal protections in these informal employment sectors leaves workers vulnerable to increased risks of household poverty. As the degree of informality within a household rises, so too does the likelihood of financial instability. Addressing these vulnerabilities requires a concerted effort to enhance regulatory frameworks, improve enforcement, and extend protections to the most at-risk segments of the workforce.

In summary, while Europe’s informal employment rates may be lower than the global average, the challenges faced by casual workers highlight the urgent need for comprehensive reforms to safeguard their rights and security.