The role of the underground economy in irregular migration to Italy: Cause or effect?

Abstract As three mass legalisations have revealed, migrants in Italy were predominantly staying on without a permit and without being entitled to pursue regular work. It was further uncovered that many legal migrants carried out unregistered work in agriculture, building, housekeeping, street trading, small manufacturing firms and within urban services. The huge involvement of migrant workers in the underground economy is often seen as an indicator of an oversupply of migrants. The underground economy, however, has been well established in Italy for a considerable period and migrants cannot be said to have brought it about, although they have doubtless contributed towards its continuation. Most migrants are employed in occupations which are at risk of being priced out of the market because of their high labour intensity and low growth in productivity. The only means of reducing the labour costs is to employ workers on an irregular basis. Northern regions are close to full employment and in the southern areas most job seekers are educated youths living with parents who can support their wait for a suitable opportunity. The national supply of labour power amenable to giving up the guarantees of regular jobs thus exhausted, the demand was for immigration. Migratory chains transmit an image of Italy being a country where it is easy to stay and to earn an income, even in the absence of a permit to stay and the presence of a significant underground economy means that Italy exerts a particular pull effect on those migrants more prone to accepting irregular conditions.