Tackling the Undeclared Economy in the European Union: An Evaluation of the Tax Morale Approach

19 Pages Posted: 19 Aug 2016

See all articles by Colin Williams

Colin Williams

University of Sheffield - School of Management

Ioana Alexandra Horodnic

Alexandru Ioan Cuza University of Iasi

Date Written: July 2016

Abstract

To evaluate a new approach towards tackling the undeclared economy, which views participants as social actors rather than rational economic actors, this article reports evidence from 27,563 face‐to‐face interviews conducted across the European Union during 2013. Multilevel logistic regression analysis reveals a strong association between participation in undeclared work and the level of tax morale. Finding that higher tax morale (and thus a lower propensity to engage in undeclared work) is strongly correlated with greater levels of state intervention but also with individual‐level characteristics such as gender, age, education and employment status, the article concludes not only by confirming a political economy approach and refuting modernization and neo‐liberal explanations and remedies, but also by revealing for the first time the importance of solutions not so far considered, including improving educational attainment, older citizens mentoring for younger people and improving women's participation in the labour force.

Suggested Citation

Williams, Colin and Horodnic, Ioana Alexandra, Tackling the Undeclared Economy in the European Union: An Evaluation of the Tax Morale Approach (July 2016). Industrial Relations Journal, Vol. 47, Issue 4, pp. 322-340, 2016, Available at SSRN: https://ssrn.com/abstract=2826126 or http://dx.doi.org/10.1111/irj.12142

Colin Williams (Contact Author)

University of Sheffield - School of Management ( email )

15 Conduit Road
Sheffield, S10 1FL
United Kingdom

HOME PAGE: http://https://www.sheffield.ac.uk/management/staff/williams/index

Ioana Alexandra Horodnic

Alexandru Ioan Cuza University of Iasi ( email )

Bulevardul Carol I nr. 22
Iasi, 700505
Romania

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
1
Abstract Views
158
PlumX Metrics