Tax Evasion, Welfare Fraud, and â€œthe Broken Windowsâ€ Effect: An Experiment in Belgium, France and the Netherlands
Mathieu Lefebvre (),
Pierre Pestieau (),
Arno Riedl and
Marie Claire Villeval ()
No 23, Research Memorandum from Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR)
In a series of experiments conducted in Belgium (Wallonia and Flanders), France and theNetherlands, we compare behavior regarding tax evasion and welfare dodging, with and without information about othersâ€™ behavior. Subjects have to decide between a â€˜registeredâ€™ income, the realization of which will be known to the tax authority for sure, and an â€˜unregisteredâ€™ income that will only be known with some probability. This unregistered income comes from self-employment in the Tax treatment and from black labor supplementing some unemployment compensation in the Welfare treatment. Subjects have then to decide on whether reporting their income or not, knowing the risk of detection. The results show that (i) individuals evade more in the Welfare treatment than in the Taxtreatment; (ii) many subjects choose an option that allows for tax evasion or welfare fraud but report their income honestly anyway; (iii) examples of low compliance tend to increase tax evasion while examples of high compliance exert no influence; (iv) tax evasion is more frequent in France and the Netherlands; Walloons evade taxes less than the Flemish. There is no cross-country difference in welfare dodging.
Keywords: public economics (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:unm:umamet:2011023
Access Statistics for this paper
More papers in Research Memorandum from Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR) Contact information at EDIRC.
Bibliographic data for series maintained by Leonne Portz ().