What drives the tax compliance attitude of individuals? The role of social ties, welfare state and environmental concern in tax morale

Resumen

The present thesis aims to provide new empirical evidence on how the tax compliance attitude of individuals could be shaped by three factors: the social capital, the intergenerational labour mobility, and the individuals concern about climate change. In the first part of the thesis, given the insights offered by the social capital literature regarding the role of voluntary organisations in shaping civic engagement, we 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 (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 our study, to carry out the classification, three alternative approaches are considered which are based on the sociodemographic heterogeneity within associations, the interconnections between them, and a combination of both. Our main 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. These results are quite robust for the three classification approaches, different estimation strategies, including an instrumental-variables methodology, and the consideration of two different groups of countries with different levels of institutional quality. 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 for promoting the public spiritedness of citizens. Secondly, we aim to shed light on the relationship between intergenerational labour mobility and tax morale among European citizens, given the relatively limited evidence on the potential influence of inequalities across generations on the individual tax compliance attitude. Exploiting data from the European Values Study (2008), we show that the larger the intergenerational mobility, i.e. the better the economic situation of children with respect to their parents, the greater the willingness to pay taxes. In this vein, subjective tax payment vii may be seen as an investment which could be rewarded with a more mobile society. This linkage is stronger and significant in countries where there is a commitment of the government to guarantee more opportunities for citizens regardless of their family context (more defamiliarized countries). Moreover, we show that intergenerational mobility significantly shapes the attitude towards tax payment only among individuals who look for independence from their family context (i.e., those showing less family ties). Again, we have checked the robustness of our results by considering different estimation strategies. This evidence stresses the importance of fostering intergenerational mobility to build a more taxcompliant society. Finally, given the increasing relevance of sustainability debates, the last chapter of the thesis investigates the relationship between climate change concern and the willingness to pay an environmental tax, considering the interplay with the general level of individual tax morale. By conducting a survey among Italian economics students, we show that climate change concern affects the attitude towards paying an environmental tax, both directly and indirectly, via a change in the preferences between the general and the specific tax morale. We also find that tax immoral subjects are particularly willing to pay an environmental tax as their awareness of climate change increases. Given that the goal is to increase the public acceptance of an environmental tax, we provide three main policy implications: i) carry out campaigns to increase the general level of tax morale, following the guidelines given by the OECD (2019); ii) raise climate change awareness among people, for instance, through investments in sensibilization campaigns on environmental-related topics; iii) increase awareness about climate change, in particular among individuals who show a lesser inclination to pay taxes. Evidence related to an inconsistent tax preference among subjects strengthens the usefulness of behavioural and experimental studies in the context of social sciences and environmental-related attitudes.