Taxes and Benefits: Two Distinct Options to Cheat on the State?

Martin Halla and Friedrich Schneider ()

No 3536, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: While there is an extensive literature on tax evasion a further aspect of cheating on the state, namely benefit fraud, has gained relatively modest attention in the economic literature. This paper seeks to fill this gap. We explore differences between benefit fraud and tax evasion due to differing social norms. We define the concepts of benefit morale and tax morale as the motivation to abstain from cheating on the state via these two offenses. Our multilevel analysis, based on a large micro data set of respondents from 29 OECD member countries, shows that benefit morale and tax morale have different determinants at an individual-level and respond differently to fiscal policy measures.

Keywords: tax morale; multilevel analysis; welfare fraud; benefit fraud; tax evasion; tax; social norms; subsidies; benefit morale (search for similar items in EconPapers)
JEL-codes: A13 H20 H26 H44 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2008-06
New Economics Papers: this item is included in nep-acc, nep-pbe and nep-pub
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Citations: View citations in EconPapers (31)

Published - revised version published in: Oxford Bulletin of Economics and Statistics, 2014, 76(3), 411–431

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Related works:
Working Paper: Taxes and Benefits: Two Distinct Options to Cheat on the State? (2005)
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