Improving fairness in the economy through a better understanding of undeclared and underdeclared work
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Funding Overview – HORIZON-CL2-2025-01-TRANSFO-05
Key Facts
* Call Identifier: HORIZON-CL2-2025-01-TRANSFO-05
* Action Type: HORIZON-RIA (Lump-Sum)
* Opening Date: 15 May 2025
* Deadline: 16 September 2025, 17:00 Brussels time (single-stage)
* Maximum EU Contribution per Project: €26 million (lump-sum)
* Indicative Projects Funded: 1-3 (based on historic budgets for similar CL2 RIA topics)
Strategic Rationale
The topic aligns with the Destination “Innovative Research on Social and Economic Transformations”. Projects are expected to:
1. Quantify undeclared & under-declared work (UDW) across heterogeneous EU economies.
2. Explain structural drivers (digital platforms, migration, rising living costs, gender stratification, etc.).
3. Assess policy and enforcement measures through robust counterfactual or experimental designs.
4. Advise policymakers & social partners with actionable, evidence-based recommendations.
Budgeting Under Lump-Sum
* 100 % funding rate for all beneficiary cost categories.
* One global amount – no cost reporting, but budgeting must be *credible & granular* in the detailed LS spreadsheet.
* Payment linked to work-package-level milestones; underruns remain at beneficiary risk.
Eligible Consortium Composition
* Minimum 3 independent legal entities from 3 different EU Member States or Associated Countries.
* Encourage multidisciplinary mix: labour economists, sociologists, data scientists, behavioural psychologists, gender studies, taxation & social-security law.
* Include national labour inspectorates / social-security administrations and social partners as full or associated partners to ensure uptake.
* Leverage European Research Infrastructures (e.g., CESSDA) and EOSC services for FAIR data management.
Added-Value Opportunities
* Possible synergies with the European Labour Authority’s Undeclared Work Platform.
* Alignment with European Pillar of Social Rights, EU Gender Equality Strategy, and Just Transition Mechanism.
* International cooperation beyond EU (e.g., OECD, ILO) is explicitly welcomed where relevant.
📊 At a Glance
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🇪🇺 Strategic Advantages
EU-Wide Advantages & Opportunities – HORIZON-CL2-2025-01-TRANSFO-05
1. Strategic Alignment with EU Policy Agendas
• Directly underpins the European Pillar of Social Rights (fair working conditions, social protection, equal opportunities).
• Feeds evidence into ongoing EU legislation on platform work, minimum wage, bogus self-employment and strengthened social dialogue.
• Supports Digital Europe & AI policy by exploring machine-learning tools to detect undeclared work, while ensuring compliance with the upcoming AI Act.
• Contributes to Just Transition & Green Deal objectives by safeguarding social fairness during twin green-digital transitions.
• Reinforces the EU Anti-Fraud Strategy and Taxation Package through data-driven insights on compulsory payment evasion.
2. Single Market Access & Scaling Impact
• A harmonised evidence base helps Member States coordinate enforcement, reducing regulatory fragmentation that currently raises compliance costs for cross-border employers.
• Standardised policy recommendations foster level-playing-field competition across the EU’s 450+ million-person labour market.
• Results can be plugged into EU Social Security Coordination Regulations and the Internal Market Information System (IMI) for rapid EU-wide uptake.
3. Cross-Border Collaboration & Knowledge Exchange
• RIA consortia must include at least three organisations from three different eligible countries; this enables comparative research across economies with high, medium and low undeclared-work prevalence.
• Access to the European Labour Authority (ELA), EU Platform tackling undeclared work, Eurofound, CESSDA, and European Migration Network ensures immediate dissemination to policy-makers and social partners in all 27 Member States.
• Multinational behavioural and counterfactual experiments generate transferable evaluation blueprints for national labour inspectorates.
4. Regulatory Harmonisation Benefits
• Evidence supports convergence of national definitions of undeclared and under-declared work, easing mutual recognition of labour-inspectorate sanctions.
• Facilitates interoperability of e-verification tools (e.g., electronic work records) across borders, lowering administrative burden for mobile workers and employers alike.
5. Access to Europe’s Innovation Ecosystem
• Full use of EOSC, CESSDA, Eurostat micro-data and emerging Labour Data Spaces accelerates pan-European big-data analytics.
• Collaboration with High-Performance Computing (HPC) centres (EuroHPC JU) enables AI-driven detection models at scale.
• Interaction with Horizon Europe Cluster 4 (Digital, Industry & Space) and EIT Digital widens exploitation opportunities for tech spin-offs (e.g., SaaS solutions for real-time compliance monitoring).
6. Funding Synergies
• Complementarity with ESF+ and Recovery & Resilience Facility reforms on labour market fairness – research outcomes can become ‘flagship reforms’ submitted in National Recovery Plans.
• Interlocks with DIGITAL Europe Programme calls on data-space deployment and GovTech interoperability.
• Provides analytical backbone for InvestEU Social Impact Products targeting financing gaps in worker-protection start-ups.
7. Data, AI & Digital Transformation Opportunities
• Horizon lump-sum model encourages bold data-collection designs (e.g., incentive-compatible list-experiments) without ex-post financial reporting, reducing administrative hurdles.
• Cross-country machine-learning pilots benefit from diverse training datasets (tax, social-security, platform APIs), improving algorithmic robustness and EU-wide scalability.
• FAIR-by-design data outputs become reusable assets for future EU research missions on social inclusion and taxation.
8. Socio-Economic Impact at EU Scale
• Estimated annual revenue loss from undeclared work in the EU (>€300 bn) represents massive recoverable fiscal space for green and social investment.
• Better detection and policy design can raise legitimate employment, reinforcing convergence between Eastern, Southern and Northern labour markets.
• Gender- and migrant-sensitive evidence advances the Union of Equality strategies and supports the demographic-change toolbox.
9. Practical Tips for Applicants
1. Build a consortium that mirrors EU heterogeneity (Nordic, Mediterranean, Central-Eastern, high-migration and platform-economy hotspots).
2. Secure letters of support from ELA liaison offices, Eurofound, cross-border trade-union federations and platform-worker associations to boost policy relevance.
3. Embed a ‘Policy Sandbox’ work package that co-creates pilot interventions with ministries from at least four Member States – a strong asset under the Impact criterion.
4. Plan clustering with ongoing Horizon projects (e.g., Tackling Undeclared Work in the Platform Economy, HORIZON-CL2-2024-TRANSFO-04) to maximise dissemination.
5. Allocate resources for a multilingual Open Science portal ensuring immediate transposition of findings into national administrative guidance.
Bottom line: Operating at EU scale transforms a stand-alone research project into a continental policy accelerator, unlocking economies of scale, regulatory coherence and innovation spill-overs unattainable at the national level.
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