“…In the Baltic Sea region and beyond, a small but burgeoning literature identifies that many employers evade their full tax and social payment liabilities and reduce their labour costs by paying their employees two wages, an official declared salary and an additional undeclared (envelope) wage (Kapelyushnikov et al, 2012;Kukk and Staehr, 2014;Meriküll and Staehr, 2010;Morris and Polese, 2014;Rodgers and Williams, 2009;Putni š and Sauka, 2011;Sasunkevich, 2014;Sauka and Putni š, 2011;Surdej and l zak, 2009;Williams, 2009aWilliams, ,b, 2010Williams, , 2014bWilliams et al, 2013). This illegitimate wage arrangement is important to study because firstly, money is being lost by governments which could otherwise pay for social protection and wider social cohesion projects, secondly, it results in a decrease in the quality of working conditions and thirdly, it represents unfair competition for legitimate enterprises thus putting pressure on them to also flout the laws and regulations and pay envelope wages (Andrews et al, 2011;ILO, 2014;TUC, 2008).…”