Study links economic growth in Germany to drop in cash-in-hand work

Black market employers have taken a hit from Germany's booming job market, with more legal work available to those previously in untaxed, cash-in-hand jobs, according to a study released on Tuesday.

The amount of people working illicitly is expected to decrease in 2016 slightly by 0.4 percentage points to 10.8 per cent, the Institute for Applied Economic Research at the University of Tuebingen said in its report.

"In good economic times, employees earn more, their hourly rate increases and they can receive paid overtime," co-author Professor Friedrich Schneider said.

"For that reason, less people want to work illegal jobs in their spare time," he said.

Germany's black labour market, however, remains big business, and is expected to generate illegal revenues of 336 billion euros (366.5 billion dollars) this year, marking a drop of 3.35 billion euros on 2015.

The report's authors warned that the swell in migration to Germany, where 1.1 million people sought asylum last year, could slow the progress. They estimate that 100,000-300,000 migrants and refugees are employed illegally in low-paid jobs, for example as cleaners or on building sites.

"The refugees are damned to do nothing in their shelters for months, so it stands to reason that they want to get out at some point and go into the illegal job market," Schneider said.

People applying for asylum in Germany often wait months until a decision is made on their case, during which time they can not seek work.

Last update: Tue, 02/02/2016 - 12:43

More from Business

Volkswagen files recall plan for 3-litre cars in emissions case

Volkswagen on Monday met a deadline for submitting a revised recall plan for 3-litre engine diesel cars caught up in...

Croatian inventors win 11 medals at London show

Six Croatian inventors and entrepreneurs won 11 medals at the British Invention Show (BIS), with Tomislav Bronzin of...

AT&T tops Bayer: the five biggest mega deals of 2016

With AT&T's offer worth over 100 billion dollars for media giant Time Warner, the US telecom firm has surpassed...

AT&T to buy Time Warner in 85.4-billion-dollar deal

Telecommunications giant AT&T on Saturday said it would buy entertainment group Time Warner in a deal worth 85.4...

AT&T agrees to buy Time Warner, reports say

Telecommunications giant AT&T has agreed to buy media conglomerate Time Warner in a deal worth 80 billion...