It is important to underline that the estimated relative probabilities are very volatile depending on the year of estimation and that the obtained coefficients do not seem to follow any easily identifiable trend. This suggests that we should treat the results obtained as more qualitative than quantitative and that we should not treat them as estimates of actual relations.

The results for the ―shadow‖ variable (Table 6) are also presented in Relative Risk Ratio terms and they can be interpreted as the change of relative risk of given transition as compared to transition to full time/open term employment resulting from the unit change of probability of shadow employment.

The estimated relative risk ratios seriously change from year to year and it may be related to high correlation of the ―shadow‖ variable with the ―contract‖ variable. In this model, they had to be used together in order to obtain interpretable results for the ―shadow‖ variable as the model specifications where only this variable was used resulted in coefficients close to infinity or zero depending on the base categories. Therefore, as in case of the ―contract‖ variable, one should treat these results more as qualitative indications of general tendencies than as estimates of actual relations.

In any case, it seems that one may try to draw some systematic observations:

- (1) From the point of view of its dependence from shadow employment, transition to part time/open term employment is not qualitatively different than transition to full time/open term employment,

- (2) Shadow employment seems to mostly influence the relative probability of transition to self-employment (as compared to full time/open term employment) although even this coefficient is not statistically significant for all years,

- (3) Shadow employment also seems to positively influence the relative probability of transition out of employment.

These results seem to suggest that shadow employment is either the way to self-employment (be it registered or not) or to unemployment. It does not seem to be the path to full time/open term contracts or to any other type of open term contracts. It is important to underline that these results are obtained with a model specification where one controls for the type of contract, i.e., they may be interpreted as ―pure‖ effects of shadow employment probability on the relative transition probabilities.

**Table 6 - RRR for transitions to given type of contract compared to full time/open term contract resulting from unit change in shadow employment probability**

|**Year**|No<br>employment<br>versus<br>full<br>time<br>open term(FTOP)|Full time fixed term<br>employment versus<br>(FTOP)|Part time open term<br>employment versus<br>(FTOP)|Part<br>time<br>fixed<br>term employment<br>versus(FTOP)|Self Employment<br>versus (FTOP)|
|---|---|---|---|---|---|
|**2004**|22.7|6.1|insignificant|5.6|20.9|
|**2005**|16.7|3.4|insignificant|insignificant|263.4|
|**2006**|32.5|7.6|insignificant|10.1|287.7|
|**2007**|insignificant|insignificant|insignificant|insignificant|51.3|
|**2008**|5.3|insignificant|insignificant|insignificant|insignificant|

Source: Author‘s calculations based on LFS data sets from years 2003-2008.