Nine out of ten household helpers work illegally. At the same time, the turnover in the shadow economy has increased by 15 percent to around 11.4 billion euros, a new study by the Institute of the German Economy (IW) shows, which was published on Saturday.
More than four million German households have household helpers, as shown by the numbers of the Socio-Economic Panel. However, most of them are not officially registered: In 2024, there were only around 250,000, a decline of 4.5 percent compared to the previous year, the study says. This results in a gap of around 3.7 million, a rate of 91 percent. The estimated turnover through illegal work in this field increased to around 11.4 billion euros in 2024, 9.8 billion in 2022.
Household helpers play an important role: they relieve many households and, in particular, enable women to expand their employment, the IW further writes. In Germany, almost half of all women work part-time. The rate is even 67 percent for mothers.
This is mainly due to the double burden of working women, as they still take on around 80 percent of household tasks. Household helpers are an important relief, enabling women to work more and thus better prepare for their own retirement. This also alleviates the shortage of skilled workers.
“Through the high illegal work rate in the household helper sector, Germany is losing substantial tax revenues, while the affected individuals are working without protection and insurance” said IW economist Dominik Enste. “The government must set the right incentives for legal employment.”
Bureaucratic hurdles and high costs often deter households. A voucher model, as already successfully implemented in Sweden, could help reduce illegal work and at the same time ease access to legal employment, argued the IW economist.