Tax morale and social capital: an empirical investigation among European citizens

Alessandro Cascavilla, Jordi Ripollés and Andrea Morone

No 2022/10, Working Papers from Economics Department, Universitat Jaume I, Castellón (Spain)

Abstract: Despite the extensive literature examining determinants of tax morale, little is still known about the relationship between the associational involvement of citizens and their willingness to pay taxes. Given the insights offered by the social capital literature regarding the role of voluntary organisations in shaping civic engagement, this study sets out to empirically investigate how membership of different types of associations could influence individual tax morale in Europe. With this in mind, we exploit the information available in the fifth wave of the European Values Study (EVS, 2017) for citizens of 34 countries. Unlike previous studies on tax morale, we classify the types of voluntary associations depending on their potential to build out-group “bridging” or in-group “bonding” social ties. In this study, to carry out the classification, three alternative approaches are considered which are based on the socio-demographic heterogeneity within associations, the interconnections between them, and a combination of both. Our findings show that, after controlling for different individual characteristics and country-specific unobserved heterogeneity, those survey respondents involved in bridging associations tend to exhibit higher levels of tax morale, while the opposite is found for bonding associations. The results are quite robust for the three approaches and different estimation strategies, including an instrumentalvariables methodology. In view of our findings, policies aimed at incentivising volunteering activities in more connected associations and in those that include more heterogeneous members seem appropriate to promote the public spiritedness of citizens.

Keywords: tax morale; social capital; volunteering (search for similar items in EconPapers)
JEL-codes: C25 H26 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2022
New Economics Papers: this item is included in nep-eur, nep-iue, nep-pbe, nep-pub, nep-soc and nep-tra
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Related works:
Journal Article: Tax morale and social capital: An empirical investigation among European citizens (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:jau:wpaper:2022/10

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