91% of Household Helpers in Germany Work Illegally, Study Finds

A new report highlights rising shadow economy revenues, declining legal employment, and calls for policy reform to address the issue.

A study by the Institute of the German Economy (IW) reveals that 91% of household helpers in Germany are employed illegally, with only 246,700 officially registered in 2024, a 4.5% decrease from the previous year.
The shadow economy in the household services sector has grown significantly, with revenues rising 15% since 2022 to €11.4 billion in 2024, up from €7 billion in 2020.
Experts attribute the prevalence of illegal employment to bureaucratic hurdles, high costs, and the lack of incentives for legal registration, leaving workers without social protections like health insurance or paid leave.
The study suggests implementing a voucher system, modeled after Sweden’s successful program, to subsidize household service costs and encourage legal employment, though it could cost up to €5 billion annually.
Legalizing household employment could boost women's workforce participation, address labor shortages, and increase tax revenues, as women currently perform 80% of household tasks, limiting their full-time employment opportunities.