Publications

Why do people pay taxes? Rational choice theory has fallen short in answering this question. Another explanation, called “tax morale”, has been promoted. Tax morale captures the behavioral idea that non-monetary preferences (like norm-submission, moral emotions and moral judgments) might be better determinants of tax compliance than monetary trade-offs. Herein we report on two lab experiments designed to assess whether norm-submission, moral emotions (e.g. affective empathy, cognitive empathy, propensity to feel guilt and shame) or moral judgments (e.g. ethics principles, integrity, and moralization of everyday life) can help explain compliance behavior. Although we find statistically significant correlations of tax compliance behavior with empathy and shame, the economic significance of these correlations are low–—more than 80% of the variability in compliance remains unexplained. These results suggest that tax authorities should focus on the institutional context, rather than individual preference characteristics, to handle tax evasion.

How does neighbors' income affect individual well‐being? Our analysis is based on rich U.S. local data from the Behavioral Risk Factor Surveillance System, which contains information on where respondents live and their self‐reported well‐being. We find that the effect of neighbors' income on individuals' self‐reported well‐being varies with the size of the neighborhood included. In smaller areas such as ZIP codes, we find a positive relationship between median income and individuals' life satisfaction, whereas it is the opposite at the county, MSA, and state levels. We provide evidence that local public goods and local area characteristics such as unemployment, criminality, and poverty rates drive the association between satisfaction and neighbors' income at the ZIP code level. The neighbors' income effects are mainly concentrated among poorer individuals and are as large as one quarter of the effect of own income on self‐reported well‐being.

This paper provides evidence that the external debt-to-fiscal revenue ratio in emerging countries follows a power-law distribution. Such a distribution reflects the fact that external debt distress or debt crises correspond to extreme events that have been found to happen fairly often. We formally test the hypothesis of a power-law, going further than the usual visual inspection of the distribution of the variable of interest on a doubly logarithmic scale. We also show that such a distribution can be derived from a theoretical model in which uncertainty comes from tax evasion and corruption. Using the framework of an optimal stochastic growth model, we model the external debt-to-fiscal revenue ratio as a diffusion process for which the stochastic steady state distribution is derived using the properties of Itô diffusion processes.

Purpose To describe: (i) patterns of self-employment and social welfare provisions for self-employed and salaried workers in several European countries; (ii) work-related outcomes after cancer in self-employed people and to compare these with the work-related outcomes of salaried survivors within each sample; and (iii) work-related outcomes for self-employed cancer survivors across countries. Methods Data from 11 samples from seven European countries were included. All samples had cross-sectional survey data on work outcomes in self-employed and salaried cancer survivors who were working at time of diagnosis (n = 22–261 self-employed/101–1871 salaried). The samples included different cancers and assessed different outcomes at different times post-diagnosis. Results Fewer self-employed cancer survivors took time off work due to cancer compared to salaried survivors. More self-employed than salaried survivors worked post-diagnosis in almost all countries. Among those working at the time of survey, self-employed survivors had made a larger reduction in working hours compared to pre-diagnosis, but they still worked more hours per week post-diagnosis than salaried survivors. The self-employed had received less financial compensation when absent from work post-cancer, and more self-employed, than salaried, survivors reported a negative financial change due to the cancer. There were differences between self-employed and salaried survivors in physical job demands, work ability and quality-of-life but the direction and magnitude of the differences differed across countries. Conclusion Despite sample differences, self-employed survivors more often continued working during treatment and had, in general, worse financial outcomes than salaried cancer survivors. Other work-related outcomes differed in different directions across countries.