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Immigration and tax morale: the role of perceptions and prejudices

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  • David Rodriguez-Justicia

    (Universitat de Girona)

  • Bernd Theilen

    (Universitat Rovira i Virgili)

Abstract

This paper analyzes whether the belief that immigrants represent a threat to welfare sustainability relates to citizens’ willingness to pay taxes. We approach this question using individual-level data from the 4th and 5th waves of the European Values Study (EVS). We find lower levels of tax morale among citizens who believe that immigrants are a strain on the welfare system. This suggests the possibility that the belief that immigration erodes the welfare system could become a self-fulfilling prophecy. Moreover, our results reveal substantial cross-regional heterogeneity and that prejudices play a role in belief formation, issues that deserve the attention of scholars and politicians.

Suggested Citation

  • David Rodriguez-Justicia & Bernd Theilen, 2022. "Immigration and tax morale: the role of perceptions and prejudices," Empirical Economics, Springer, vol. 62(4), pages 1801-1832, April.
    • Handle: RePEc:spr:empeco:v:62:y:2022:i:4:d:10.1007_s00181-021-02083-7
    DOI: 10.1007/s00181-021-02083-7
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    More about this item

    Keywords

    Immigration; Tax morale; Tax compliance; Welfare system; Welfare state sustainability;
    All these keywords.

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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