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

23 Pages Posted: 10 May 2010

See all articles by Martin Halla

Martin Halla

Johannes Kepler University Linz - Department of Economics; IZA Institute of Labor Economics

Abstract

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.

Keywords: tax morale, tax evasion, tax compliance, underground production

JEL Classification: A13, O17, H26, Z13, C81

Suggested Citation

Halla, Martin, Tax Morale and Compliance Behavior: First Evidence on a Causal Link. IZA Discussion Paper No. 4918, Available at SSRN: https://ssrn.com/abstract=1603367

Martin Halla (Contact Author)

Johannes Kepler University Linz - Department of Economics ( email )

Altenbergerstrasse 69
A-4040 Linz, 4040
Austria

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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