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Tax Morale and Compliance Behavior: First Evidence on a Causal Link

  • Halla, Martin

    ()

    (University of Innsbruck)

Recent literature on tax evasion emphasizes the importance of moral considerations to explain compliance behavior. As a consequence scholars aim to identify factors that shape this so-called tax morale. However, the causal link between tax morale and actual compliance behavior is not established yet. Exploiting exogenous variation in tax morale – given by the inherited part of tax morale of American-born from their ancestors' country of origin – our instrumental variable analysis provides first evidence on a causal effect of tax morale on the size of the underground production.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4918.

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Length: 23 pages
Date of creation: Apr 2010
Date of revision:
Handle: RePEc:iza:izadps:dp4918
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