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How family ties affect trust, tax morale and underground economy

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  • Marè, Mauro
  • Motroni, Antonello
  • Porcelli, Francesco

Abstract

This paper reports empirical evidence supporting the hypothesis that family ties should be considered among the main determinants of tax morale, underground economy and trust. In societies where the power of the family is very high, the quality of public institutions tends to be low. This connection shapes the behavior of taxpayers and tends to increase the underground economy. The econometric analysis is based on linear panel data models and a new original dataset that puts together data on personal values, social capital and tax morale, in combination with an index of the shadow economy. The final results show that in countries where family ties are stronger, the level of trust and tax morale is lower, while underground economy is higher.

Suggested Citation

  • Marè, Mauro & Motroni, Antonello & Porcelli, Francesco, 2020. "How family ties affect trust, tax morale and underground economy," Journal of Economic Behavior & Organization, Elsevier, vol. 174(C), pages 235-252.
    • Handle: RePEc:eee:jeborg:v:174:y:2020:i:c:p:235-252
    DOI: 10.1016/j.jebo.2020.02.010
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    1. Dai nipoti ai nonni: la pandemia circola in famiglia
      by Alessio Garau in La Voce on 2021-06-11 21:27:09

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    Cited by:

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    2. Colin C. Williams, 2023. "A Modern Guide to the Informal Economy," Books, Edward Elgar Publishing, number 18668.
    3. Luca Di Gialleonardo & Mauro Marè & Antonello Motroni & Francesco Porcelli, 2020. "Family Ties and the Pandemic: Some Evidence from Sars-CoV-2," Working papers 100, Società Italiana di Economia Pubblica.
    4. Nadia Jacobi & Vito Amendolagine, 2023. "What feeds on what? Networks of interdependencies between culture and institutions," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 40(2), pages 371-412, July.
    5. Ling Tian & Haisong Dong, 2022. "Family Life Cycle, Asset Portfolio, and Commercial Health Insurance Demand in China," IJERPH, MDPI, vol. 19(24), pages 1-18, December.
    6. Mariarosaria Agostino & Sabrina Ruberto, 2023. "Family Ties, Social Capital and Small Businesses’ Efficiency. Evidence from the Italian Food Sector," Journal of Family and Economic Issues, Springer, vol. 44(4), pages 935-955, December.
    7. Amendolagine, Vito & von Jacobi, Nadia, 2023. "Symbiotic relationships among formal and informal institutions: Comparing five Brazilian cultural ecosystems," Economic Systems, Elsevier, vol. 47(3).
    8. Nadia von Jacobi & Vito Amendolagine, 2022. "What Feeds on What? Networks of Interdependencies between Culture and Institutions," Working Papers 11, SITES.
    9. Canh Phuc Nguyen & Binh Nguyen Quang & Thanh Dinh Su, 2023. "Institutional frameworks and the shadow economy: new evidence of colonial history, socialist history, religion, and legal systems," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 50(3), pages 647-675, September.
    10. Paraskevi Koufopoulou & Colin C. Williams & Athanassios Vozikis & Kyriakos Souliotis & Antonios Samprakos, 2021. "Estimating Shadow Economy Size in Greece 2000 - 2018: A Flexible MIMIC Approach," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 71(3-4), pages 23-47, July-Dece.
    11. Litina Anastasia & Varvarigos Dimitrios, 2023. "Family Ties and Corruption," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 23(1), pages 195-222, January.
    12. ten Kate, Fabian & Klasing, Mariko J. & Milionis, Petros, 2023. "Societal diversity, group identities and their implications for tax morale," Journal of Comparative Economics, Elsevier, vol. 51(3), pages 1048-1067.
    13. Rocco Caferra & Alessandro Cascavilla & Andrea Morone, 2022. "Family affairs or Government's duty? The tax morality of a mobile society," Working Papers 2022/09, Economics Department, Universitat Jaume I, Castellón (Spain).

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    More about this item

    Keywords

    Family ties; Tax evasion; Trust; Panel data;
    All these keywords.

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure

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