Behavioral interventions, tax compliance and consequences on inequality

Darius Deparade, Lennart Jarmolinski and Peter Mohr

No 2025/4, Discussion Papers from Free University Berlin, School of Business & Economics

Abstract: Tax evasion is associated with high social and fiscal costs. To address these, many governments employ behavioral interventions given their low implementation costs and high potential efficiency. Although many studies report positive effects of behavioral interventions to combat tax evasion, the effect sizes are often quite small. This may result from the partial cancellation of heterogeneous effects and prompts calls in the literature for individualized or group-tailored interventions. While classification approaches for taxpayer types exist, their practical implementation is limited by data availability. We systematically review 144 studies conducted between 1996 and 2024 and show that group-tailored interventions along key inequality dimensions-gender, income, age, and regionality-may not only enhance tax compliance but also help address inequality. Furthermore, our heterogeneity analysis shows that intervention effectiveness can be enhanced by the incorporation of specific characteristics related to framing, intervention frequency, and communication channels. Finally, we present a theoretical model to support group-tailored interventions and thus provide policymakers with an efficient strategy to combat tax evasion.

Keywords: Tax Compliance; Behavioral Intervention; Heterogeneity; Inequality (search for similar items in EconPapers)
JEL-codes: D31 D90 H26 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-exp, nep-iue, nep-nud, nep-pbe and nep-pub
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:fubsbe:318371

DOI: 10.17169/refubium-47421

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