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What Makes a Tax Evader?

Author

Listed:
  • Marcelo Bergolo
  • Martin Leites
  • Ricardo Perez-Truglia
  • Matías Strehl-Pessina

Abstract

Why do some individuals evade taxes while others do not? We study this question using administrative tax records from Uruguay linked to a tailored survey of taxpayers. Using third-party reports, we measure individual income under-reporting as an indicator of evasion. We then examine how three factors predict who evades: social preferences (e.g., honesty measured through incentivized laboratory games), peers (e.g., the behavior of current and former coworkers), and economic factors (e.g., the marginal tax rate). We find that social preferences have little power to predict evasion, while economic factors matter more and peer behavior is the strongest predictor.

Suggested Citation

  • Marcelo Bergolo & Martin Leites & Ricardo Perez-Truglia & Matías Strehl-Pessina, 2026. "What Makes a Tax Evader?," CESifo Working Paper Series 12432, CESifo.
    • Handle: RePEc:ces:ceswps:_12432
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    File URL: https://www.ifo.de/DocDL/cesifo1_wp12432.pdf
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    More about this item

    Keywords

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    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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