This chapter examines four aspects of the research on the underground economy in France. After a brief review of the historical interest in the subject and a discussion of the most frequently employed terminology, I report on the results of several regional surveys that have been conducted in order to gain an insight into the nature of the problem of “clandestine labor.” This will be followed by a survey of the empirical estimates of tax evasion in France and by a macro-economic estimate of the size and growth of the underground economy in France employing Tanzi's (1980) estimating method.

Terminology

French legislation concerning clandestine labor dates back to 1936. Immediately following the Matignon accord, which established paid holidays, a law was passed in June 1936 forbidding paid work during paid holidays. In October 1940, a multiple-job-holding law was adopted: “No one may undertake an industrial, commercial or professional job on his own account unless he is registered either in the commercial register or the trade register and unless he pays the social and taxation charges levied on that profession.” The adequacy of these laws was severely questioned by Mr. Antoni who, in his report on the fight against clandestine labor prepared on behalf of the Economic Council (March 1950), drew special attention to “the disquieting extension of the clandestine labor market.” The current legislation concerning clandestine labor was adopted in July 1972, largely as a result of pressure exerted by professional organizations that frequently put forward the argument of unfair competition.