Minimum Wage Underpayment in the informal economy

Commissioned by Department for Business, Energy and industrial Strategy

The aim of this feasibility study was to outline how future research might be designed to estimate the scale and nature of NMW underpayment in the informal economy. This was a hard-to-measure area, presenting a number of challenges. We focused on two broad methodological themes – namely the methodological challenges and the data challenges – in structuring out approach. We over-layed this with a general challenge about measuring the informal economy: the behaviours around non-compliance necessarily mean data was riddled with systematic biases for under-reporting. Our approach also included expert reviews, recognising such input was needed to assure the approaches recommended.

Read more in our report here