Beyond The Formal Economy: Evaluating The Level of Informal Employment In Montenegro

This paper aims at investigating the level of informal employment on the Montenegrin labour market. For estimating the size of informal employment a direct method was applied using two surveys based on the opinion of the enterprises and employees. This two surveys are used for the approximation of the level of informal employment, as well as for the evaluation of the losses for the fiscal revenues and the Budget as a whole. The conducted analysis reveals the significant degree of the anomalies on the labour market, especially regarding degree of the informal employment which is highly correlated with many structural reforms in the economy and the crisis that affected the Montenegrin economy in the preceding period. The authors conclude that that employment should be a corner stone of the future development of Montenegro and therefore, diminishing the level of informal employment should be one of main tasks for the Montenegrin Government since it produces many negative effects for the economy.