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Taxes and Benefits: Two Distinct Options to Cheat on the State?

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Author Info
Halla, Martin () (University of Linz)
Schneider, Friedrich () (University of Linz)

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Abstract

While there is an extensive literature on tax evasion a further aspect of cheating on the state, namely benefit fraud, has gained relatively modest attention in the economic literature. This paper seeks to fill this gap. We explore differences between benefit fraud and tax evasion due to differing social norms. We define the concepts of benefit morale and tax morale as the motivation to abstain from cheating on the state via these two offenses. Our multilevel analysis, based on a large micro data set of respondents from 29 OECD member countries, shows that benefit morale and tax morale have different determinants at an individual-level and respond differently to fiscal policy measures.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3536.

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Length: 35 pages
Date of creation: Jun 2008
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Handle: RePEc:iza:izadps:dp3536

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Related research
Keywords: tax; subsidies; tax evasion; benefit fraud; welfare fraud; tax morale; benefit morale; social norms; multilevel analysis;

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Find related papers by JEL classification:
H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets
A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values

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References listed on IDEAS
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Halla, Martin & Lackner, Mario & Schneider, Friedrich, 2009. "An Empirical Analysis of the Dynamics of the Welfare State: The Case of Benefit Morale," IZA Discussion Papers 4165, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  2. Justina A.V. Fischer & Benno Torgler, 2006. "Does Envy Destroy Social Fundamentals? The Impact Of Relative Income Position On Social Capital," STICERD - Development Economics Papers 46, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE. [Downloadable!]
    Other versions:
  3. Friedrich Schneider, 2006. "Shadow Economies and Corruption All Over the World: What Do We Really Know?," IZA Discussion Papers 2315, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  4. Heinemann, Friedrich, 2007. "Is the Welfare State Self-destructive? A Study of Government Benefit Morale," ZEW Discussion Papers 07-029, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
    Other versions:
  5. Schneider, Friedrich, 2008. "The Shadow Economy in Germany - A Blessing or a Curse for the Official Economy?," Economic Analysis and Policy (EAP), Queensland University of Technology (QUT), School of Economics and Finance, vol. 38(1), pages 89-111, March. [Downloadable!]
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